Don't let Uncle Sam take you for a ride

April 15 is just around the corner. Hmmm, that date sounds familiar. My friend's birthday? No. Parents' anniversary? No. Damn it, what was that date? Oh. Right. Tax Day.

April 15 tends to be more of a concern for our parents than for us, especially if we don't have a job to worry about. These days, however, more college students are working while they are in school. Although a large number live on the campus, many work jobs in local restaurants, bars and bookstores. Of course, these jobs don't pay as much as Wall Street investment bank jobs (I hold an on-campus job, and I definitely need a raise), but they do provide a little extra income on the side.

Along with earning money comes the most enjoyable civic responsibility of all - giving Uncle Sam his due. Many people avoid this by using loopholes that allow them to avoid paying taxes on most of their annual income. In Maryland, only annual income more than $8,000 is taxable. Suppose, however, that you are not being claimed as a dependent on your parents' tax returns, and you make a little over this amount on an annual basis.

There is a wonderful tax credit, known as the Earned Income Tax Credit. It was especially designed those living below the poverty line. The catch: You have to be filed as an independent tax earner to qualify.

The other trick is that it has to be applied to "Earned Income." For example, "investment income" (interest earned from a savings account, or capital gains earned on stock market transactions) does not qualify. Earned income means wages, tips, salaries and the sort. The limits change every year, but as of 2006, those without a child and earning a taxable income of $5,380 to $6,740 are eligible for a tax credit of $412. This is the maximum credit that can be taken on the federal returns, given the aforementioned conditions.

I was at a United States House Ways and Means Committee hearing earlier last month on the EITC, and the question of why more people are not claiming this credit was discussed. The findings revealed that a majority of the people for whom EITC was intended did not even know of its existence. The federal government is pushing programs to increase awareness of this credit, designed to benefit people like us who are living off of limited incomes, and is one of the largest poverty reduction programs in the U.S.

It turns out that many people do not read their tax returns properly. The Internal Revenue Service estimates some 15 percent of eligible taxpayers do not claim their EITC credits, resulting in much unclaimed money. Unfortunately, because the minimum age is 25, not many middle-class college students will be eligible for this credit. Fortunately, those who are paying their way through college, older students, or those are financially independent will benefit from it.

In any case, it might be worth it to take a second look at the returns to determine if you owe anything at all, and if so, which tax credits you are eligible for. For example, there are many different credits that can be taken on student loans. Again, the catch is that you have to be financially independent.

There are people who make copious amounts of money filing tax returns for people. In this day and age of filing returns electronically, and the stunning amount of resources available on the Internet, there should be no excuse for anyone not to claim each credit he is due. Remember, the majority of your taxes have already been paid throughout the year. April is usually a time when people receive a refund from the government for having overpaid their taxes. Make good use of this chance and get back every dollar you are owed, because otherwise, it's just an interest-free loan to the government. I know it's not the most fun time of year to comb through the fine print of the tax code, but the feeling of getting a refund will make that effort well worth it.

Abhi Chandrasekhara is a sophomore finance and economics major. He can be reached at abhijnya@umd.edu.