Updated and adapted for November 2023.
Navigating tax-time as a law student can be … complicated. Some of the messiness stems from the variability in law student backgrounds and life stages, so you won’t necessarily be able to turn to your peers for guidance.
Here’s a framework for cutting through the complexity as you wrap up another tax season: Learn the basic tax terms and updates for the current year, access the tools you need, and get help when the time is right.
It always helps to start with a basic understanding of tax lingo before taking the next steps. Here’s a crash course in tax terms to know and how they can help you determine next steps, and for complete information on all things taxes, check out IRS Publication 501.
Standard Deduction: The standard deduction is the amount you can deduct from your income regardless of your expenses. For 2023, it is $13,850 for single filers under 65, and $27,700 for married filing jointly. You’re required to file a tax return if you earned over the standard deduction in 2023, but you may choose to file even if you earned less.
Tax Deductions and Credits: Even if you choose the standard deduction, you’re still able to benefit from other deductions that reduce your taxable income, like contributions to a 401(k), traditional IRA, and health savings accounts. Tax credits are different from deductions in that they offset your actual tax liability (not your taxable income), dollar-for-dollar.
Form W-4: An IRS form you submit to your employer, so they know how much to withhold from your paycheck for federal and state taxes.
Form W-2: A form generated by your employer(s) and sent to the IRS that reports your annual wages and the federal and state income taxes they’ve already withheld on your behalf.
Form 1040: The form used by U.S. taxpayers to file an annual income tax return. It outlines all your income, expenses, deductions, and credits and conveys your information to the IRS for federal income tax purposes and your state for state income taxes (if applicable).
This list of terms certainly isn’t exhaustive, but it’s a good starting point if you’re just starting to deal with your taxes yourself. Now that you have a handle on common tax terms, let’s turn to the tools you can use to determine whether you need to (and/or should) file, and how to file if applicable.
Do law students need to file a tax return?
Whether or not to file depends largely on the income you made in 2023. Income from all sources should be accounted for, including earned income like regular or self-employment wages, and unearned income from dividends and capital gains. Scholarships are also included in the mix if the scholarship was used to pay for living expenses.
Once you account for your income across all categories, you’ll also need to know if you’re being claimed as a dependent by your parent or someone else, as that can impact your filing requirements.
According to the rules for most taxpayers, single filers who earned more than the $13,850 standard deduction in 2023 are required to file a tax return ($27,700 for those married filing jointly). Keep in mind, these income thresholds vary if you’re 65 or older, or if you’re using a different filing status like head of household, married, filing separately or qualifying widow(er).
If you didn’t earn over the standard deduction in 2023, you may not be required to file, but you still may choose to do so to get a refund of any withholdings your employers did take through the year. The IRS provides a Do I Need to File a Tax Return? Interactive Tool to help you determine whether you’re legally required to file. They also provide a handy Tax Withholding Estimator.
If you are required to file, be sure to take advantage of education-specific tax benefits like the Lifetime Learning Credit and the student loan interest deduction. There are eligibility rules for claiming these benefits, so for more information check out IRS Publication 970 Tax Benefits for Education.
Dependency Considerations
Generally, parents can claim their children as dependents on their tax returns up to age 24 if they’re attending college. If your parents claim you, you can still file a return (and may even be legally required to do so), but it’s important to know that benefits like the student loan interest deduction and lifetime learning credit can only be claimed by your parent in this case. If your parents are over the income threshold for certain benefits, it might make sense for them to not claim you so you can file your own return with a lower income to qualify. This is just one example of why taking the whole family into consideration is important. It’s worthwhile to get professional tax help on these types of questions.
Tax Filing Tools
There are many paths to take when it comes to filing taxes. If you have a fairly simple tax situation and an adjusted gross income (AGI) below $73,000, you may be able to file your taxes for free through IRS Free File. Alternatively, some tax software and online programs offer a free-file service for simple returns. Free help is also available through the IRS Volunteer Tax Assistance (VITA) program for those who qualify.
Getting Help
Professional tax help is available for all levels of income – from filing a simple return with online or in-person appointment services to filing a more complex return with a firm you use year-to-year. Finding professional tax help can be as simple as asking local groups, peers, or professors for referrals to established certified public accountants (CPAs) in your area. This is how many people identify a pro, but there are other ways, like searching the database at the National Association of Enrolled Agents or using the American Institute of CPAs Find a CPA Tool.
Build your tax toolbox using the links in this article
- IRS Publication 501
- Do I Need to File a Tax Return? Interactive Tool
- Tax Withholding Estimator
- Lifetime Learning Credit
- Student Loan Interest Deduction
- IRS Publication 970 Tax Benefits for Education
- IRS Free File
- IRS Volunteer Tax Assistance (VITA)
- National Association of Enrolled Agents
- American Institute of CPAs Find a CPA Tool
The information provided in this article is for educational purposes only and should not be considered tax or legal advice. Consider whether the information is appropriate for your needs and where applicable, seek advice from a tax or legal professional.
