Tax tips for college students and their parents

abcnews.go.com:

There are lots of things college students and their parents should keep in mind before filing their taxes

NEW YORK — There are lots of things college students and their parents should keep in mind before filing their taxes, and while tax pros say it’s great for college students to start filing their own forms, parents and students should double check everything carefully before anyone pushes the “submit” button.

For dependent students filing taxes for the first time, it’s easy to overlook checking the “dependent” box, and they cannot then be claimed on their parents’ tax forms without the long and arduous task of amending the return merely for failure to check a box.

“College students need to be very careful that they understand whether or not their parents are eligible to claim them as a dependent,” says Tom O’Saben, director of tax content and government relations at the American Association of Tax Professionals. Merely not claiming a dependent does not make that taxpayer independent, he says.

There are two kinds of education tax credits. The American opportunity credit is for up to $2,500 a year (based on at least $4,000 spent on tuition, books and fees) for the first four years toward an undergraduate degree.

The second, a lifetime learning credit, can be used toward an undergraduate, graduate or professional degree and is for up to $2,000 (based on 20% of qualified education expenses.) A parent cannot claim both for the same dependent child (or a student can claim it) on a return for the same year, but if there are multiple dependents on the return they could be using either of the credits (but not both at the same time) for each student.

While most tax-related forms arrive dependably in the mail, college students