Video instructions and help with filling out and completing Fill Form 5495 Filing

Instructions and Help about Fill Form 5495 Filing

Cool so I'm here with Eileen brown from H&R Block and she's just gonna go through some of the basics of filing for taxes with me for students because it's something that's really confusing and I don't even understand it all right so the very most basic question for students is do I even need to do this do I have to file for taxes so what's your take on that it is always best to file a tax return because it shows a record of income that you've received that you may need for student loans that you may need for the future if you're gonna purchase a home or just to show a record to the IRS and have it logged in another strange thing for students is that you're a dependent usually on your parents tax return so do I still file or how can I file differently or do I even want to continue filing as a dependent on my my parents tax return well your your exemption is What's in question and so and it's a very important people make this mistake all the time so it's best to talk to your parents and see if they're claiming you as a dependent on their tax return if they are that does not mean that you can't file you still want to file so if they're claiming you is a dependent on their tax return there's some tests that determine dependency and if they are supporting your University stay or your college day and you know your tuition and whatnot there are credits related to that okay so a really simple question here what is actually the difference between a credit and a deduction that's a good question so a deduction will lower your income so that when you look at the tax tables you're going to be taxed on a lower taxable income a credit lowers taxes directly so and there are there are refundable credits and there's credits that will bring your tax down to zero okay so now we get into some of the good stuff what are some kind of you eeeek tax credits tax deductions that a student can take maybe things that usually people don't realize to file for you know and with the new Recovery Act they just passed there is a credit that has really changed in a very big way for students and so of course there's a Hope Credit which has been around for a while and the whole credit is targeted to assist individuals who are in their freshman or their sophomore year the first two years the Hope Credit goes up to $1,500 what it does is it it will reduce your taxes it won't create a refund but it'll bring your taxes down to zero up to $1,500 so that's it's a substantial credit after that hope credit them there's a Lifetime Learning credit the Lifetime Learning credit caps up at $2,000 with the new Recovery Act they just passed what like three weeks ago there is the new American Opportunity education tax credit and what that is it's an enhanced Hope Credit so it takes the instead of just the first two years freshman and sophomore it expands it to four years of learning credit and it moves that $1,500 to $2,500 which is really cool editing expenses like the purchase of a computer things that are used for the college state and then it takes the $2,500 credit or whatever the credit is anything up to caps at $2,500 and makes 40% of it refundable so if any of it is unused it can actually move you into a refund which is very cool and brand-new so what are some ways that H&R Block can help a student you know whether I'm filing online or whether I'm filing with H&R Block or the family's accountant what are some things that you guys offer we'll check a person's tax return for $29 so if there's missing items on someone's tax return and that happens four out of five times so when we check someone else to texture and whether its family CPA whether it's dad's always done my tax this type of thing or whether I was online and I used this this type of service we'll check that tax return so all right at the very basics I've got you know someone else perhaps preparing for me or maybe I'm doing it myself but um what do I need actually to start with what are the actual forms that I need to get this rolling major w-2 if you've got a w-2 if you're self-employed you need the books on that you need to show the income so anything related to income whether it's taxable are not taxable that's something the tax professional will assist in determining some some items are not taxable some are and then how any documents that come through the mail so if someone's got stock trade which is common then we need to see that paperwork in order to determine what part what portion of it is taxable or not taxable so so statements from financial institutions and then also expenses related to B's that a student has incurred during the year so basically I just want to save all school related expenses in a brown bag or manila folder write it all down in a nice chart and then also keep all forms that say letter - number right right send those in and then I pretty much taken care of absolutely most tax documents say tax documents enclosed on the outside of the envelope so you know those you want to definitely bring it okay cool well thanks a lot Eileen I really appreciate it I'm sure the students appreciate it they might have to watch through the video a few times to get through like some of some of the jargon and