The Battalion. (College Station, Tex.) 1893-current, February 23, 1978, Image 6

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Empty your pockets, its income tax tini( <
‘Loopholes’ for
students use, too
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
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
Support — received more than
half of support from taxpayer or
Exceptions and special cases are
explained in an IRS information
guide on exemptions for depen
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-
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
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
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
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
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
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
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
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
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
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
tional and
• 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.
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
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
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,
— I really don’t know anything
about it to tell you the truth. Dad
takes care of all that. — Freshman,
— 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