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Five tax questions with Maryland Comptroller Peter Franchot

By WTOP Staff

Five questions with Peter Franchot

1. What do I need to start getting together for my tax filing?

Before an individual files a Maryland income tax return, that individual is required to complete a federal income tax return. Often the same documentation required to complete the federal income tax return is also required to complete the Maryland return.

This documentation may include:

Taxpayer information (including the Social Security numbers, full name, birth date for all individuals on a return)

Form W-2s

Form 1099s

Form 1098s

IRA/pension/annuity/profit-sharing plan records

Alimony records

Receipts for business expenses

Receipts for education expenses

Receipts for medical expenses

Receipts for travel expenses

Receipts for child care expenses

Receipts for charitable contributions

2. When is it safe to discard old tax file copies or documents, receipts, etc.?

Generally, an individual should keep tax records for at least three years from the date of filing a return or filing deadline, whichever is later.

3. If I want to give a gift of money to someone, do I need to fill out a form so they won’t have to pay taxes on it?

In most cases, the recipient of the gift will not be taxed for the value of the gift. However, in some cases, the donor of the gift may be responsible for paying a federal gift tax.–Maryland does not levy a gift tax. In most cases, both the recipient and donor of the gift will not need to file additional forms in Maryland. Note that a gift may have Maryland estate tax implications.

4. If I file early and tax laws change, what should I do? Will I be informed of a refund or to pay more?

The Comptroller’s Office is committed to informing Maryland taxpayers about changes in the law. If a taxpayer files a return, and there is a subsequent change to the law that affects the taxpayer’s return, the taxpayer is generally responsible for filing an amended return to report the effect of the law change.

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5. What are good resources (Comptroller’s and IRS website, reputable preparer)?

The Comptroller’s website is an invaluable resource for individuals and businesses alike when it comes to tax information. In fact, you can even file your state taxes for free by going to www.marylandtaxes.com.

Some other good resources include the U.S. Internal Revenue Service at www.irs.gov.– The Maryland CASH Campaign site offers valuable tips and also information on how to receive free and safe tax preparation at locations across the state, www.mdcash.org. In addition, if you are searching for a reputable paid tax preparer, check the Maryland Department of Labor, Licensing and Regulation for tax preparers that have registered with the state and have the required skills and certificates.–

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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