file or don't file taxes? and what happens if i dont?

Forum|Forum|2 years ago
March 27, 2024
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So I am a 21 year old college student who was granted financial independence for extenuating circumstances (emotional and previous physical abuse at home). I have since taken out loans (about 7K) to support myself so my parents have not supported me in more than half my expenses. I am also a recipient of the federal pell grant totaling about 6.5K a year. I'm not sure if I should file any taxes, but my parents are not claiming me as a dependent on their tax file. Im wondering how it would affect me doing my FAFSA as well without an IRS tax file.

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BillM223

A loan is not considered income, because you have to pay it back. A Pell grant is also not considered income, so long as it is used for qualifying education expenses. See "Do you have to pay taxes on your Pell grant"?

Now that you know these two things, you should try the IRS Interactive Assistant "Do I need to file a tax return?"

In similar situations, college students often are not required to file a return, but do so in order to recover the tax withheld on their part-time job. But we don't have enough information to say yes or no - that's why I suggested the IRS Interactive Assistant.

We do not answer FAFSA questions here.

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Hal_Al

Employee

Based on what you described, you are not required to file a tax return.

The question, you didn't ask is: can you file a tax return to get the American Opportunity (tuition) Credit (AOTC). The answer is no.

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on 529 plans or student loans & grants. It is usually best if the parent claims that credit.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863