Denton Personal Tax Preparation

Students, Faculty and Families

With tens of thousands of students at the University of North Texas and Texas Woman's University, Denton has many residents filing their first returns, along with faculty, staff, plant workers, musicians and families. Texas has no income tax, so the federal return is usually the only filing. BOMCAS prepares personal returns for Denton residents remotely.

Homestead exemptions and community property are explained on the Texas personal tax page. This page covers Denton's students, faculty and freelancers.

Students and Their Parents

Most undergraduates are claimed as dependants by their parents, who can take the American opportunity credit of up to $2,500 a year for four years of college. Scholarships and grants used for tuition and required fees are tax free; amounts used for housing and meals are taxable. Students who work part time should file to recover withholding even when they owe nothing.

Graduate Assistants and Fellows

Teaching and research assistants receive wages reported on Form W-2. Tuition reductions given to graduate students who teach or do research are generally tax free. Fellowship stipends that are not payment for services are often paid without a W-2 and without withholding, but they are still taxable when not used for tuition, so fellows may need to make estimated payments.

Faculty and University Staff

University employees choose between the Teacher Retirement System and the Optional Retirement Program, and can add 403(b) and 457(b) plans. Faculty with consulting, book royalties or speaking fees report them on Schedule C, with deductions for related expenses.

Musicians and Freelancers

Many Denton musicians, sound engineers, designers and artists work for themselves. Income from gigs, streaming, merchandise and teaching goes on Schedule C, with self-employment tax. Instruments, equipment, recording costs, travel to gigs and part of a home studio can be deductible. Payment platforms report to the IRS, so records should match.

Plant and Hospital Workers

Peterbilt and hospital employees often earn overtime. The deduction for qualified overtime for 2025 through 2028 covers the federally required premium part of overtime pay, up to $12,500, or $25,000 for joint filers, with a phase-out at higher incomes.

Landlords and Parents Who Buy for Students

Parents sometimes buy a house near campus, live elsewhere and rent rooms to their child's roommates. If the child pays fair rent, the property can be treated as a rental with deductions; if the child lives there free, it is personal use. Rental losses are limited for higher-income owners.

Royalty Owners

Denton sits on the Barnett Shale, and many residents receive gas royalties. Royalties are reported on Schedule E, with a depletion deduction; individual royalty owners can often take percentage depletion of 15 percent of gross royalty income, subject to limits. Lease bonuses are ordinary income, and payments for surface damage may reduce the basis of the land rather than being taxed as income.

Moving to Denton for a Job

Faculty and professionals who move to Denton usually cannot deduct moving expenses on their federal returns, and reimbursements from an employer are taxable wages. Those moving from states with income tax may need to file a part-year return in the state they left, and should check whether that state taxes income received after the move, such as bonuses or deferred pay.

Retirees

Retirees receive Social Security, pensions and IRA withdrawals. People 65 or older can claim an extra deduction of up to $6,000 each from 2025 through 2028.

What to Bring

W-2s, 1099s and Form 1098-T.
Scholarship and fellowship letters.
Self-employment income and expenses.
Rental income and costs.
Royalty statements.
Last year's return.