5 Tips for Doing Your Taxes for the First Time
Tax season is here, which means working Americans across the country are settling up to their desks and digging through piles of documents, all to keep the government happy and maybe even receive a refund. While filing taxes isn’t fun for anybody, it’s hardly a big deal for most Americans. There is, however, one group for whom the process is undoubtedly unnerving: people filing for the very first time.
If this is your first time filing, you’re about to engage in an activity that has been a part of American life for generations. You’ve probably heard relatives whining about tax season for as long as you can remember. Now, as you get ready to participate yourself, it’s important to recognize that filing taxes really isn’t such a big deal.
You might be worried that you’ll forget a document and receive a massive fine or miss a signature and get hauled off to jail. In reality, you have nothing to worry about as long as you do your best and complete all the documents in good faith. What’s more, you can probably look forward to a healthy refund if your employer has been withholding money from your paychecks.
In the end, all you have to do is relax, do some research, and send in the necessary forms. Here are five tips that will help make the process even easier.
Get Your Documents Together
Before you actually send anything to the government, you should make sure you have all your necessary documents. Start by making a list of all the jobs you held during the previous year. Then, make sure you have a W-2 form from every employer and a 1099 form for any work you did as an individual contractor. You should also get a hold of any receipts that prove business expenses.
Check If Anyone Is Claiming You As A Dependent
One thing you’ll have to answer truthfully on your form is whether anyone else is claiming you as a dependent. Many parents claim their older children as dependents to lessen their own tax burden. Your parents are likely to claim you as a dependent if you’re under the age of nineteen and receive parental support. If you’re a student, they can claim you as a dependent up to the age of twenty-three. You should talk to them about this before filing your taxes.
Consider All Possible Deductions
The government offers various tax deductions to people who meet certain criteria. Investigate what deductions are available from the federal government as well as your state. If you’re paying a student loan, working at a home office, or earning only a small wage, you probably qualify for at least one deduction.
Make Sure You Include Your Side Hustles
These days, more people than ever before participate in the gig economy. If you walk dogs, deliver food, or drive for Uber on the side, you need to report this income along with your state and federal tax returns. You should receive a 1099 form for each of these projects. You should also report the expenses you’ve accrued for your gig work. Proving these expenses through receipts should get you a larger refund.
File Online
All the steps mentioned above become much easier if you file online. Luckily, the government sponsors free electronic filing for everybody under a certain income threshold. If this is your first time filing, you almost certainly make the cut. Check out various online filing services to see which one seems easiest to you. With the right online service, you can file your taxes in a single afternoon.
