ALEX LASSITER: Hello, lovely people! It’s Alex Lassiter with the Minnesota Daily, and you’re listening to In The Know, a podcast dedicated to the University of Minnesota.

There’s an old saying that goes like this, “only two things are certain in life: death and taxes.” You know who said that? Benjamin Franklin. A dead guy who ended up on the 100 dollar bill which, ironically, can be put toward taxes. And even though #Y.O.D.O. (you only die once), you can expect taxes to roll around at the same time every year. However, every year varies.

I know a lot of people think tax law can be boring, but it can be kind-of like the Wild West of finance. I mean, just when you think the dust is settling, BOOM! There’s a new sheriff in town. This year is different for me, even on an individual level. I’m a student who’s had three jobs, lived in two apartments and ran a side hustle selling Pokémon cards on eBay. 

TAMMY NAPLES: Tax is interesting just because it changes every year. I mean, it especially has changed in the last 10 years. But, it really does change at a minimum. Everything’s just changing with inflation every year, so nothing is the same every year.

 I study this. I deal with it every day and I don’t know what my tax return’s gonna look like next year because of all the changes that could come. Whether there is legislation or not, there will be changes.

 LASSITER:  That was Tammy Naples. She’s an expert in tax law and a professor with the Carlson School’s Masters of Business Taxation program, or MBT for short. We talked a lot about how fluid tax law is and how quickly it can change. And after a presidential election that resulted in a new sitting president, some of that law was bound to change pretty quick.

DAVID HORN: The new Trump administration is, as I’m sure most people are aware, is they’re going after federal agencies and cutting staff. One of the main targets is the IRS. But I think it’s been up to about 12,000 layoffs of IRS personnel. They also put a spending freeze on the Internal Revenue Service indefinitely, meaning they cannot increase their budget, meaning they can’t hire more people down the road. So it’s causing, obviously, a little bit of turmoil within the agency, as with all the agencies that are impacted by this.

LASSITER:  David Horn is also a professor with the MBT program at Carlson, and the number of layoffs he gave is now close to 15,000. This sounds a little troubling, especially since we’re getting so close to the deadline to file.

So will these layoffs affect how long it will take for people filing taxes to get their return back? And what about people getting audited? Will people be more likely to take advantage of the situation and cheat on their taxes?

HORN: You’re probably going to start to see down the trickle down effect. They’re gonna examine less people, less corporations and the messaging from the administration is that they aren’t laying off people that are processing returns.

So if you’re filing a return, theoretically, according to the administration, it should still get processed in a timely manner. Now obviously, when you have these mass layoffs, and they just announced they want to reduce the workforce of the IRS by half going forward, that’s going to cause morale issues with people within the agency.

LASSITER: You know, it’s funny. Working adults who file their taxes actually have quite a bit in common with college students because a lot of them love to wait right until the assignment is due to turn it in.

If your professor suddenly loses their right hand, it would definitely take a little while extra to grade your paper. Okay, it’s a bit of a grotesque metaphor, sure, but with the IRS losing so many employees, could we expect to see the same thing on their end this year?

HORN: Most of the staff reductions within the IRS are on the enforcement side—so if you think about people coming out to audit your tax return if they find a mistake. Not so much on, like, processing returns.

The administration has said that these layoffs won’t impact the processing, but I’m a little bit dubious about that proposition. My advice is, if you have any concerns about your return being processed timely is to do it soon. If you haven’t done it yet, get it in as soon as possible because the closer you get to the filing deadline, there’s just a tidal wave of returns being filed on April 15.

LASSITER: Naples got her family’s taxes done early, so she got to serve as the sort-of “trial run” for whether Horn’s theory of lower morale among IRS agents would be correct.

NAPLES: I have four teenage daughters. I filed their tax returns and was wondering as I submitted their refunds, whether they would come or not. They did. They did. We actually just got ’em this past weekend. But there is a lot more uncertainty, I think, of just when those refunds are coming. 

LASSITER: And mine actually came in pretty quickly too, which is just another reason to get yours done early. Cause there’s really no telling how it’ll look when we actually hit the deadline. And hey look, student-to-student, there’s no shortage of reasons to care about doing your taxes. In fact, if yours are simpler than mine (which they probably are), then you should absolutely take advantage of that fact and get ‘em done.

HORN:  I would venture to guess that an average college student is probably not working full time. If you are working full time, you’re probably a W2 earner with relatively low income. Nothing against that, you’re here to get an education not necessarily start a career. In which case then yeah, you’re probably not paying a significant amount of taxes.

NAPLES:  I think that sometimes the biggest barrier for students is they either forget to file or they think, “Oh, I don’t need to. I don’t, I won’t owe anything. So, you know, it’ll be fine.” But really they’re missing out on those refunds. For a typical student, they shouldn’t have too much complexity.

As you get older, you’ll itemize deductions. That causes much more documentation for charitable contributions and medical expenses and taxes and all these things. Most students don’t have a significant amount of itemized deductions to need to do that, so their tax returns should be fairly straightforward.

 LASSITER: Now, working for a boss gets you a W2. I’ve had three of those. Living in an apartment gets you a Certificate of Rent Paid. I’ve had two of those. But if you’re running a side hustle like, say, I don’t know… selling Pokémon cards on eBay, you may need to do a little bit of extra work if you’re at a high enough income threshold.

HORN:   If you get a 1099 as opposed to a W2, you are classified as an independent contractor. When you’re an independent contractor, it’s kind of similar to a trader business. You would report all that income that’s reported to you on your tax returns, but then you can take deductions for any expenses that you incurred associated with that activity. So you can take mileage on your car, if you had to buy a uniform. Just basically any job-related expenses or any expenses incurred related to that activity, you can generally deduct.

LASSITER: Now, because not all of you are running trading card stores on eBay, this probably won’t matter to a lot of you right now, but the threshold for taxable income from eBay sales is going down next year, by a lot. Right now, you get taxed if you sell $5,000 or more worth of stuff. Next year, it’ll be $600 or more. So if you’re selling anything on eBay—not just trading cards—you might wanna keep that in mind.

As you grow further and further into adulthood and start to try earning money in more varied ways, like selling stuff on eBay, it can turn into a lot to manage. Making sure you have all of your forms organized won’t only make it easier for you, but it’ll also help in making the jobs of the tax agents filing your returns as simple as possible. Which, in a funky year like this, will help a lot.

NAPLES: You see more and more organizations are switching over to “log into a portal and download this 1099 or what have you.” And I know that can be difficult, especially for students where they have multiple jobs and multiple, you know, they’re moving and all different addresses, different portals and passwords.

It sounds simple, but a lot of it just can be compiling all that information, right? Making sure that you’re not missing a 1099 or missing some type of W2, whatever it is. But making sure that you have all that paperwork, ’cause you don’t wanna miss out.

LASSITER: And I know, I know—after all the work of, y’know, working, and then filing and then waiting for that fresh, fresh return to hit your bank account, it’s really tempting to go out to a fancy dinner or pick up that slick pair of new kicks you’ve had your eye on. But our Carlson professors both had the same advice of not blowing it all in one place. Instead, they suggested you play a couple rounds of the waiting game.

NAPLES:  An IRA would give you a tax deduction so it would minimize your tax liability, potentially increase your refund and that would start your retirement savings.

I know that’s hard to think about when you’re just starting your careers. But you are aware of time, value of money, and starting, when you’re 21-22 an IRA, you will thank yourself when you’re 62, when you’re retiring because of the compounding effect of that.

HORN:  It’s my PSA I give to all my students, invest as much as you can, as early as possible. 40 years from now, you will be thanking yourself for doing it. So I always like to plug that one in there.

LASSITER: Look, I get it. I’m not really jumping for joy when tax season rolls around. I don’t have a special date marked off on my calendar with a big ‘ol red circle. But especially as a student, this stuff is important to know. And for someone with quirky taxes like me, or an international student, or a student with dependents, it helps to know a little bit more what you’re doing. 

So talk to your mom, talk to your dad—talk to anybody in your life who can help you out. And get those taxes done, so that way you can stroll in through those saloon doors and say to yourself, “I’m the sheriff ‘round these parts.”

And don’t forget, taxes are due April 15, so you’ve got a little under two weeks as of the release of this episode to get yours done if you haven’t already.

This episode was written by Alex Lassiter, and produced by Kaylie Sirovy. As always, we appreciate you listening in. So please feel free to send an email to the podcasting@mndaily.com inbox with any questions, comments, concerns or story ideas that you want to see us to produce this next season. I’m Alex Lassiter, and this has been In The Know. Take care, y’all.