Q&A: Michael Vickers
As we enter the new year it means it is that time again, tax season. This time of year can bring out mixed emotions in many people. Some could be lack of understanding, financial fear, or being under time pressure. But with the negativity around taxes there are also positives too. Sometimes you can get refunds or the accomplishment of getting organized.
I interviewed Michael Vickers who is a tax preparer and came with questions about taxes that people should know about or even for students just starting to file for the first time.
Q: What should students know about taxes?
A: Taxes show a snapshot of your life.It may only show someone working part-time (if your parents claim you as a dependent), but it shows your life in one financial snapshot.
Q: What impact does this have on the average person?
A: Again, a mixed bag, yes, you get a deduction for your overtime, but it is only the part above your hourly rate, and the law caps that deduction at $12,500 or $25,000. Or if you are a full-time bartender or server working in a restaurant in SF, LA, NYC, etc. The tips area is capped at $25,000 (you are probably going to make more than $25k in tips)
Q: What advice do you have for students who are filing for the first time?
A: The main point for students is communication. Talk with your parents and find out if they are claiming you as a dependent (you can be a dependent through age 23 if you are a full-time student), and be willing to send any documents that they need, for example, 1098-T.
Q: What is the best way to file taxes?
A: Use a tax service. It could be an online service like TaxSlayer or an in-person service like H&R Block, but either will prepare and e-file the return.
Q: What are your thoughts on The Big Beautiful Bill?
A: It’s a mixed bag, some good, some head scratching, some bad.
“Good-SALT cap raised to $40k, child tax credit raised to $2200, the head scratching- the 3 ‘no tax on’ provisions, the Bad- the end of the EV and energy efficient properties credits.
Q: What should a student claim on taxes? Such as textbook purchases and parking passes? Etc
A: I would have a conversation with your parents and the tax preparer first because the American Opportunity Credit (AOC)can only be claimed for 4 years and only for getting your Bachelor’s degree, if it will take you more than 4 years to get the degree, you are better off using the Lifetime Learning Credit (LLC) for the first year or 2 then do the AOC. For the AOC, you can claim tuition, books, and equipment (e.g., computers). For LLC it is only tuition and books.
Q: Anything else you’d like to add about taxes that we should know?
A: The main thing left to point out is a procedural change at the IRS, make sure you have your banking information, the IRS is really starting to discourage people from receiving paper checks for refunds to the point that if you want a paper check, they will send you a notice asking if you want a paper check or if you forgot your bank information. Once you confirm you want a check, they will send it. That process from e-file to receiving the check will take 12-16 weeks.
