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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 going to go through some of the basics of filing taxes with me for students. It's something that's really confusing, and I don't even understand it all. 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? Eileen: It is always best to file a tax return because it shows a record of income that you've received. You may need this record for student loans or if you're going to purchase a home. It's also important to have a record logged with the IRS. Another strange thing for students is that they're usually dependents on their 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 parents' tax return? Eileen: Your exemption is what's in question here, and it's a very important issue. Many people make this mistake all the time. It's best to talk to your parents and see if they're claiming you as a dependent on their tax return. Even if they are claiming you as a dependent, it doesn't mean that you can't file. You should still file. If they're claiming you as a dependent, there are some tests that determine dependency. If they are supporting your university stay, college expenses, tuition, etc., there are credits related to that. Okay, so a really simple question here. What is actually the difference between a credit and a deduction? Eileen: That's a good question. A deduction will lower your income, so when you look at the tax tables, you'll be taxed on a lower taxable income. A credit, on the other hand,...