Ask the Expert: Fourth in a Series

Alejandra Yañez | THE RIDER

With the 2021 tax season underway, a UTRGV student expressed concern about filing his tax return. 

Oscar Peña, a computer science senior, is confused about how his stock market investments affect his taxes.

 “I worked this past summer when COVID-19 started, and we had to go to online classes,” Peña said. “I started working at Walmart.”

He said he is still waiting on his W-2 form.

Asked if he had any reservations about filing, Peña replied that he is not sure how to include his investments in the stock market on his tax return.

“I’ve invested, so I’m not sure how that works,” he said. “I’m probably going to go to a tax accountant to see how that works because I still have to file my [tax return] on that.”

Peña still is not sure who he will file with, but said he will more than likely go with his parents’ tax accountant.

He said he wants to know how to determine if he owes any money, and if so, how much time he has to pay it off.

 “The most important question I would have is, just like, if you do receive or owe money on your taxes, like, how long do you have to pay them, and like, when will you actually receive that amount that you are supposed to receive,” Peña said. “I know a lot of people don’t realize how much they owe in taxes, so, as a first-time [filer], I would want to know if I owe money: How much time [do] I have and how much do I owe?”

UTRGV Expert

Siamak Javadi, a UTRGV assistant professor of finance, addressed some of the questions that Peña asked.

Javadi said it is important to file because “taxes are mandatory, so there’s no way around it.”

 “If you don’t pay your taxes, the IRS is gonna come after you,” he said. “Doesn’t matter how much you hate paying taxes.”

From an ethical perspective, he said it is one’s civic duty to pay taxes.

“We are using all the infrastructure that the government states local taxes are providing for us, like roads, bridges and all these constructions,” Javadi said. “So, these utilities need to be financed, so that’s how we pitch in. We contribute to the welfare of society.”

The finance professor said by paying taxes, citizens create a “social safety net,” such as Medicare and unemployment benefits. 

“As a society, we need to provide some type of a safety net in case somebody loses their job due to unfortunate circumstances,” Javadi said. “So, there is a moral component to paying taxes as well.”

Asked how students can ensure they do not make mistakes when filing a tax return, he replied, “I assume most students, they do not have a lot of assets, so their tax returns to file are pretty simple and straightforward.”

Javadi said confusion arises among people, such as older students, who have more assets.

“If an older student that has been working for quite some time, and now is back in college and has a house mortgage, a couple of properties and investments in the stock market, that would be a little more complicated,” he said. “That would be a situation where a student might want to talk to a tax accountant.”

Javadi said tax forms do not have much room for error since the change in format in 2017.

“You just have to have your W-2 form, and do your standardized deduction and there can be errors, but there are companies that can help,” he said.

The finance professor encourages students to utilize the free services that the university offers to help file their tax returns. 

UTRGV has partnered with United Way and H&R Block to help students file through the software MyFreeTaxes, according to the Student Services Center website. 

Javadi’s advice for students who are filing their tax returns for the first time is to keep a positive mindset and remember that they are now contributing to society. 

“Don’t look at this from a sinister perspective, like, ‘Hey, the government is trying to take my money,’” Javadi said. “Think of it as you are paying your share. You’re using whatever this society has been providing for you, the roads and the sense of security and all. … So, they do come after a lot of money that you’re making, but you need to contribute, too. … You need to look at it from that perspective.”

He encourages students to ensure that they understand their taxes and ask for help when necessary.

“Make sure you understand the taxes,” Javadi said. “Do not delay it, and you do not want to mess with the IRS. So, once you are at the age where you have to file, do it correctly, do it properly and don’t delay it.”

Asked if he had any financial advice for students, he replied that students should invest when they are young because they have time on their hands.

“Don’t get bogged down with taxes,” Javadi said. “You can’t fight it. Like the old saying goes, ‘There are two things certain in life: death and taxes.’ So get over it. But you have time on your side, so invest every little bit that you can.”

He encourages students to not move the money they put into investments. 

“You people need to invest, and you don’t need to invest in a single stock. Just invest in a passive investment, like an index fund, and forget that money,” Javadi said. “Just let it roll. You do not have to monitor the stock market every day. Just let it roll.”

Students interested in filing their tax returns for free can visit www.myfreetaxes.com or go to U Central on the Brownsville or Edinburg campuses through March 6 to get step-by-step help from a VITA-certified United Way tax consultant.

U Central is open between 9 a.m. and 4 p.m. Monday through Friday.