When you're in college, the last thing on your mind is paying income taxes. However, not only could you find yourself facing fines and penalty for nonpayment of taxes that will continue to add up until paid, but you might also be losing out on refunds of taxes withheld from your paycheck during the year.
Earned Income Only
If you are a typical 18- to 22-year-old college student who only has income from a job and your parents claim you as a dependent, you can earn up to $5,700 a year before you need to file a tax return. Not filing a tax return doesn't mean you won't have paid taxes, though. You will have still had income and FICA taxes withheld from your pay. To get any of these taxes refunded, you need to file a return.
Unearned Income Only
If you are a college student who has received only unearned income throughout the year, then you need to file a tax return if you received more than $950 in income. However, since taxes are generally not withheld, you shouldn't need to file a return to recover any taxes.
If you had mixed income, then you will need to complete a short worksheet in your tax packet to find out what your limit is. However, because mixed income will include earned income, it is income that will generally have taxes withheld before you receive your paycheck and you will need to file a return in order to have those taxes refunded.
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College students can get most, if not all, of their income taxes that were withheld refunded. This is because their low income in combination with tax credits--like the earned income credit, additional child tax credit, health coverage tax credit, refundable credit for prior year minimum tax or refundable American opportunity education credit--reduce and eliminate their tax liability.