As college students, we’re always looking for ways to make and save money. More importantly, we’re looking for ways to not pay any money if we don’t have to. So when tax season rolls around, everybody is trying to scramble and find the accountant that can “write-off” certain purchases throughout the year in order to avoid paying Uncle Sam.

You can do this, but chances are you will raise some red flags with the IRS.

It’s June… why are you writing an article about  tax season?

Now is the time to start your tax planning. You file a tax return next year for things that are happening this year. When January rolls around, it’s too late. What happened in 2008 happened in 2008, and there’s no turning back. You must file your taxes in the position you are in.

But it’s up to you what position you are in. Despite popular belief, the tax law has a lot of gracious laws (”write-offs”) to help stimulate growth in the economy, higher education and giving back to society.

You should know, “write-offs” are really deductions and credits. What’s the difference?

Hypothetically speaking, say you have $100 income for the year, and receive a $30 deduction. Now, $70 is taxable. If ytou are in the 10% bracket, you will owe $7 to the IRS.

Now say you have $100 income for the year, and you are in the 10% bracket. You now owe $10 to the IRS. Then, you receive a $30 credit. You will have a $20 refund on your taxes ($10 - $30 credit  = -20).

Credits are dollar for dollar. These are what you want… but take anything you can get!

There’s a nice little list of deductions and credits that directly apply to most college students (or their parents). Stay tuned to the tax write-offs blog series to take full advantage of these tax savings.

Remember, anytime you can save money or pay less money, value is added.

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