5 Questions First-Time Tax Filers Need To Answer [EXCERPT]

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Woman holding up a white flag with a question mark on it.

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Welcome to March—a month famously known for a few things: madness, a date to avoid, and for many people, filing taxes.

Of course, one could probably make a strong case that “madness” and “avoidance” describe most people’s feelings about their taxes. However, here at SALT™, we’re looking to make taxes less, well, taxing this month. (Clearly not through clever wordplay, though.)

To do this, we enlisted help from an organization that knows a few things about tax prep: H&R Block.

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SALT has teamed up with H&R Block and H&R Block Dollars & Sense to help students and alums take control of tricky financial topics—like how to file taxes for the first time.

Check out this excerpt from their new article on saltmoney.org, and click through to read all five questions they say first-time filers should know how to answer.

If you recently entered the “real world,” you may soon encounter the realest thing about it: filing taxes.

Yes, nothing screams (or, more likely, sighs) “I’m an adult” than W-2s, deductions, and adjusted gross income. And while that all sounds painful, doing your taxes for the first time doesn’t have to be that bad. In fact, you can make it easier just by being able to answer these five questions.

1. Are You Someone’s Dependent?

An easy way to determine if you’re a dependent is to ask your parent or guardian if they are claiming you on their tax return. They can claim you as either a qualifying child or qualifying relative, depending on your situation.

Generally, you might be a qualifying child if:

  • You are under 19 OR under 24 and a full-time student.
  • You lived with a parent or guardian for more than half the year. (Note: Even if you were away at school, you still “lived” at your primary residence, according to the IRS.)
  • That individual provided more than half of your financial support for the year.

If you are not a qualifying child, you may still be a dependent as a qualifying relative if:

  • An individual provided more than half of your financial support for the year.
  • You lived with that individual for the entire year OR that individual is your parent, grandparent, aunt, uncle, or sibling.
  • Your gross income was less than the dependency exemption ($3,900 for 2013).

If someone claims you as a dependent, it can significantly impact your income tax return. For instance, that individual can claim your exemption instead of you ($3,900 for 2013). You also may not be able to claim certain deductions and credits on your return that you may otherwise qualify for (e.g., Earned Income Tax Credit, American Opportunity Credit) …

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SALT is a free, nonprofit-backed educational resource that provides simple, smart, personalized ways for college students and recent graduates to take control of their student debt and manage their finances. With a combination of helpful tools, tailored information, and unbiased expertise, SALT helps young people borrow less, borrow smart, and repay their loans in a way that works for them. Create your free account today.

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