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About The Battalion. (College Station, Tex.) 1893-current | View Entire Issue (Feb. 23, 1978)
Page 6 THE BATTALION THURSDAY, FEBRUARY 23, 1978 focus Empty your pockets, its income tax tini( < i ‘Loopholes’ for students use, too By LIZ NEWLIN Battalion Staff The Ides of April, the day Uncle Sam collects his share of Americans’ paychecks, looms less than two months away, but a gloomy attitude is not mandated by the tax codes. “Every child born in America can hope to grow up to enjoy tax loopholes,” noted observer Richard Strout. Even college students have their share. For instance, most stu dents who file income tax returns can claim themselves as a dependent and so can their parents if the parents provide more than half the child’s support. This applies to married stu dents also. Another plus for students is that scholarship money generally does not count as income, so it cannot be taxed. A new benefit is child care credits, expanded this year to include full time students. Students are consid ered now to be “gainfully em ployed,’’ one of the requirements to receive the credit. The credit equals 20 percent of payments for child care expenses for employment-related child care and other household serv- The IRS, he said, determines “who can claim whom” using five tests. Each dependent claimed must meet all the tests, simplified below: Gross income test — received less than $750 total income. This does not apply to children under 19 or full time students. - did not file a spouse. Each Frank Nason, tax collector for the Internal Revenue Service in Brazos County, said dependency is the “A number one” question he receives about taxes. Joint return test joint return with couple filing jointly may claim at least two exemptions. Citizenship — generally, a citizen of the United States or a resident of Canada, Mexico, Panama or the Panama Canal Zone. Relation — must be a natural or blood relative or member of the tax payer’s household for the entire year. Support — received more than half of support from taxpayer or spouse. Exceptions and special cases are explained in an IRS information guide on exemptions for depen dents. This publication and most others offered by the IRS are available at the Bryan IRS office, Room 503 Var- isco Building, 219 N. Main St. Tax payers may also call or write the Internal Revenue office. The toll- free number for Texas is (800) 492- 4830. The major question most people have after checking the five tests, Nason said, concerns a married couple where one or both partners are students. The couple and their parents, he suggested, should figure their taxes twice, once claiming the students as dependents and once with the young couple filing jointly. “They (parents) can claim married kids as dependents as long as the children don’t file jointly,” Nason said. Filing status can make a difference in the amount all parts of the family pay. For example, Mike and Gloria are married students, and their par ents still provide more than half their support. Not counting scholarships, which are non-taxable, Mike and Gloria together make $6,000. Each set of parents earns $20,000. Mike, Gloria and their parents figured the taxes two ways — claim ing them as dependents and letting them file a joint return. When Mike’s parents claim him as a de pendent, they owe the government $187 less than when he files a joint return with Gloria. The same is true for her parents. Mike and Gloria each pay an additional $3 by filing separately. In this example, the families save $368 if the children file separately. This may not always be the case, but it’s worth investigating, Nason said. Job services beat the old help Aggies work crunch By PAIGE BEASLEY Battalion Staff Texas A&M University spends about $3.6 million to employ about student part-time employment on the Texas A&M campus, Fink said. This office provides listings of jobs available for students, both on and 5,000 undergraduate students for off campus, but does not take job part-time work during the academic year. More than 2,400 students appear on the bi-weekly payroll, but the total number of persons working on campus throughout the year is some times more than 5,000, said Clair Fink, student financial aid adminis trator. A minimum wage of $2.30 an hour or higher is paid to all student work ers, he said. The rate of pay depends on experience, the employer or the department. Fink said the largest employers of undergraduates on campus are the food services, the University library, Memorial Student Center, and the schools of agriculture, animal sci ence and veterinary medicine. Other jobs range from farmwork, ground maintenance, clerks, se cretarial, lab assistants, researchers and graders, to various work within departments. Fink estimated that between 2,000 and 3,000 students work ofl campus during the year. Off-campus jobs usually begin at $2.65 per hour, but depends on employer policies. The Student Financial Aid Office in the YMCA building, coordinates applications or make job placements. The TEC has job books which provide daily accounts of jobs available in Brtjan- Callege Station. Job leads are placed on clip boards in the Student Financial Aid Office, and are available to all students, he said. These leads are removed when the job is filled or after 45 days, un less notified by the employer that the job is still available. Students are responsible for mak ing appointments with the em ployers and setting salary and work hours. Students are paid bi-weekly for on-campus employment. Pay ment to off-campus workers depends upon the employers. On-campus workers must be cleared through the Student Finan cial Aid office in order to be put on the payroll, said R.M. Logan, direc tor of student financial aid. To be cleared, student employees must complete employment forms, in come tax forms, and have a physical examination. Employers must com plete a personnel data form on all employees. Logan said his office works closely with the Bryan office of the Texas Employment Commission (TEC). TEC sends job listings to the Finan cial Aid Office. Charles Gillespie, manager of TEC, said his office prepares a dis play in the Memorial Student Center at the beginning of each semester. This helps students to become famil iar with TEC, and it gives TEC a chance to distribute applications for employment. Applications are also kept in the Student Financial Aid Office. Follow the arrows to find out whether you must file a Federal income tax return. Answer “Yes” or “No” to each question in turn to lead to one of the final boxes: “File a return by due date (April 15)” or “You do not have to file a return.” tional and Visitors. • Gross income: all compen sation for personal services, taxable and non-taxable. Job leads are placed on clip boards in the Student Finan cial Aid Office. Explanations of terms follow, in order of their appearance: • Pub. 519: United States Tax Guide for Aliens. Pub. 518 is for Foreign Scholars and Educa- • Unearned income: proceeds from trust funds, savings ac counts, stocks or bonds. • Self-employment income: also known as “contract labor,” people who are paid the full amount for their services are self-employed, regardless of age. Students are contract laborers when their employers do not withhold Social Security or in come tax. Contract laborers must pay self-employment tax on their self-employment income. This tax is comparable to the social se curity tax withheld from an em ployee’s wages. A full-time em ployee who earns less than $16,500 as an employee and who earns $400 or more from self- employment usually is liable for the self-employment tax. Pub. 533 is Information on Self- Employment Tax. • Earned Income Credit: spe cial payment of up to $400 may come as a refund check or be applied against taxes if (I earned income was less $8,000 and (2) you paid more than half the cost of keeping tipi home in the U.S. in which you lived and which for the entire year was also the home of your child who was under 19 years or a full-time student. Applications outline skills, inter ests, and qualifications of the appli cants, Gillespie said. Applications are filed for future reference, so the applicant can be contacted when a job is available. He added that TEC has job books which provide daily accounts of jobs available in Bryan-College Station. A list of statewide job opportu nities is also available. TEC is operated by the state, Gil lespie said, so there is no charge for its service. Forms easy, but be careful The IRS says this year’s revised federal income tax forms are easier to complete. For most people it’s sim ply fill in a few blanks, look up the correct tax and mail. But the Internal Revenue Service cautions taxpayers not to be lulled into carelessness. Mistakes on the return slow pro cessing. So does using the wrong tax table or failing to attach all W2s and other necessary documents. One of the most common errors, the IRS says, is a missing signature. Errors in arithmetic can be corrected by the IRS without great delay, but a missing signature forces the IRS to send the return back to the taxpayer and slows the procedure even more. The smart taxpayer, the IRS says, will use the pre-addressed label and coded envelope sent with the in struction package. These items speed processing the return, getting the refund to the taxpayer days el even weeks sooner. The IRS checklist: suggests the following V preaddressed label attached to the return and all necessary cor rections made on the label V copy B of all W2 forms are attached V all required forms and sched ules, with supporting information, are included V the arithmetic is correct V the correct tax table or tax rate schedule was used to compute the tax all entries are on the cor rect lines V the payment, if required, is attached. This payment shouldbe) the form of a check or money oi and made payable* to Internal Rn nue Service. The check or mi order should also include the payer’s social security number. V the return is signed. If ing jointly, both spouses must sign j a paid preparer completes the turn, the preparer must also sign V the return and all suppi ing information are mailed usini coded envelope that comes witl tax package V keep a copy of the ret«! for personal files — Liz Ne*i It 9 s Uncle Sam s turn TOO MANY COOKS? BAH! THE PUBLIC'S BEEN TAKING THIS STUFF FOR YEARS. Time is drawing near for students to join the rest of the nation in paying their dues to Uncle Sam. A random sampling of 217 Texas A&M Univer sity students indicates that more than 77 percent are planning to file a tax return this year. Students were polled by tele phone this week and asked questions dealing with income, expenses, and taxes. About 3 percent did not an swer the questions. Summer employment was shown to be more popular by the working student. Seventy-six percent said they worked during the summer, while only 33 percent said they are working now. Students who work part-time throughout the year, earn an average of $255 a month. The largest number, 32 percent, said they re ceive less than $250 a month, yet others make more than $1,000. The average working student works from 14 to 19 hours a week. Parents and students finance 74 percent of college educations for Texas A&M students. Eighteen per cent of the students pay all educa tional expenses, while 29 percent re ceive some help from their parents. Parents pay all the expenses for 27 percent of the students. Schol arships, grants, and loans provide the other means of financial support for students. Overall, students are working and aware of taxes. When questioned about taxpayers cheating on their tax forms, some students said: — I think it’s wrong. It’s not right. It’s against the law, but if they want to do it, that’s their business, not mine. — Senior, agronomy — I don’t do it, but I can sure understand why they do it. — Soph omore, education — It is a pretty low thing to do. They ought to be shot, I mean, they ought to be punished. — Gradu ate, architecture — More power to them if they can find loopholes. — Junior, phy sical education — Not Kosher. — Sophomore, psychology — I really don’t know anything about it to tell you the truth. Dad takes care of all that. — Freshman, education — I’ve never been that higl that I have to worry about it. B they get away with it, I’ll be« ’cause I didn’t. — Graduated cultural economics — I wouldn’t do it simply bei I don’t feel it is right. This isnia^ because I fully understand thep pose of taxation and I feel thatit| fair. — Freshman, political scM — I think it’s pretty chicken Graduate, entomology Editor’s note: This is the secom a series of opinion polls tobef fished in The Battalion. Student Introductory reporting eo4 administered the survey to217T( A&M University students, \ names were chosen randomly the campus directory. The tel name in each column of the rami directory was called, unless the son could not be reached. Then, next person in that column was tacted. This is an informal poll, future polls will be checkedfontsl tical accuracy. A copy of the ijiii tions and complete survey results: available in The Battalion office —Paige Beaskt h