How Interns Can Maximize Their Tax Returns

Tue, Oct 23, 2012

Internship Uncategorized

Even though you have a million and one things vying for your attention during the last two years of college, you know that fulfilling an internship is a key step towards nailing a great job after graduation. It takes an awful lot of time to find all of those internship opportunities, put together a resume that still sounds impressive even though you have almost no experience, apply, interview, and finally get picked from the dozens or hundreds of other applicants. And then you actually have to do well at that internship, balancing your school schedule and social life while hustling as much as you possibly can to make yourself invaluable to your internship manager. Once tax time comes around you may be so burned out that you don’t even care how it goes. You’ll simply submit to being declared a dependent on your parent’s taxes and just be thankful you don’t have to really think about this stuff yet. Well, put down that spring break vacation catalogue and think again. Wouldn’t a tax refund come in handy next semester? If you wouldn’t mind getting some money back from the government next year, follow these steps to maximize your tax returns.

First off, you must file your own return. Sure, up until this point you’ve simply been a deduction for your parents. And there’s nothing wrong with that. If you make very little money this year it may make more sense to go that route, especially if your parents will use the savings to help you pay your tuition and other college expenses. But you should at least take the time to look into what sort of refund might be possible. This is doubly important if you work at a paid internship. Your parents may not yet be willing to lose the benefits of claiming you, but talk to a tax professional and at least find out what the alternative might be. If it gets you one step closer to financial independence, your parents might be all for it.

You should also look into deductions you can claim based on tuition payments. If your parents take care of this, you will not be eligible. But if you’ve started making your own tuition payments it is something you must carefully consider. The tax laws continue to change, but students are allowed to deduct certain amounts of their tuition costs and the fees surrounding registration. Keep solid records of all of your education-based expenditures, and with a simple review you could quickly figure out if you are due for a refund.

Next, don’t forget about the interest deductions on any student loans. This will completely hinge on whether you have already begun repaying those loans or not. If you are waiting until after graduation, you are probably better off sticking with your parents filing. But if you are in a post-graduation internship or have already started loan repayments for whatever reason, any money you’ve spent that goes towards loan interest is deductible. Check out the rules online at the Internal Revenue Service website or ask a reputable Phoenix accountant to find out exactly what you can claim.

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