Paying Tax

• In most cases, all taxpayers, including full-time students, only receive a tax refund if they pay taxes during the year. For most people who work for an employer, tax payments are made through withholding each pay period. Therefore, you need not be concerned with getting a tax refund unless you earn money during the year and are subject to tax withholding, even if it's just a temporary job you have during your summers off.
  
  

Filing a Return

• Even if you earn minimal income during the year from which income tax is withheld, you should always file a tax return since this is the only way to obtain a refund. If only small amounts are withheld from your wages, don't assume that this is what you actually owe. For federal tax purposes, a certain amount of your earnings are not going to be subject to income tax. This is because all taxpayers are usually entitled to claim an exemption for themselves if no other taxpayer is eligible to claim them as a dependent, plus a standard deduction amount. For example, in 2010, a single taxpayer's first $9,350 of income will not be subject to tax. But because full-time students are frequently the dependents of their parents, this is something you also need to take into account.
  
  

Student Dependents

• Students of all ages attend school full-time, but if you are under the age of 24 and don't provide more than half of your own financial support during the year, then your parents are most likely eligible to claim you as their dependent on a tax return. If this is the case, you can still file a tax return for your refund, but more of your income may be subject to tax. This is because as a dependent, you are unable to to claim an exemption for yourself. Your standard deduction is also limited to the amount you earn plus $300 if this total is less than the normal standard deduction for a single taxpayer. In contrast, a single taxpayer who is not someone's dependent can reduce taxable income by claiming both an exemption and the full standard deduction amount.
  
  

Student Tax Benefits

• There are a wide range of tax-saving benefits available that generally cover the costs associated with attending school full-time. However, you generally cannot claim these if your parents claim you as a dependent, but they can take them on your behalf. But if you do file a tax return and are not a dependent, these benefits can reduce your tax bill, and may even provide you a full refund of all taxes you pay. These include tax deductions for your tuition and student loan interest payments plus two tax credits that can reduce your tax bill on a dollar-for-dollar basis. However, aside from student loan interest, you can only claim one credit or deduction for your tuition.