If you’re filing your own taxes for the first time, give yourself a pat on the back. This is a major life milestone that signals your growth into true adulthood. Up to this point, your parents likely claimed you as a dependent and did your taxes for you if you had an after-school job.
Now, you’re taking charge of your own finances, and it may be a bit intimidating at first. Don’t panic – doing your taxes isn’t as hard as you think. Read on to discover several tips that will help you file your taxes for the first time.
1. Get Your Tax Documents in Order
Whether you hire an accountant or file your tax return online, you’ll need to make sure you have all the pertinent documents handy. W-2s, 1099s, receipts, and other documents may continue to come to you via email or mail throughout the first few months of the new financial year, so wait until you have everything before you do your taxes. If you miss filing an important form on your return, you may need to amend it later.
2. Figure Out if Your Parents Still Claim You as a Dependent
Though you have a job, you might still depend on your parents for financial support. For example, you may still live in their home or attend a college for which they pay the tuition. In these cases, your parents may qualify for tax breaks if they claim you as a dependent. If your parents claim you as a dependent, you’ll still file a return if you made enough money, but you’ll need to indicate on your return that someone else is claiming you as a dependent.
Before you do your taxes, touch base with your parents to find out if they are claiming you as a dependent. That way, you’ll all know you’re correctly managing your tax obligations.
3. Don’t Be Afraid of Deductions
You may be entitled to certain deductions and credits that lower your tax obligation. Many first-time DIY filers are intimidated by deductions, but they are there to help you save money. Some common deductions/credits you may be able to claim include education credits, student loan interest deductions, and the Earned Income Tax Credit. If you aren’t sure which deductions and credits you qualify for, and you’re using software like TurboTax, the program will ask questions to determine which route is the best for your financial situation.
4. Don’t Forget to Report Freelance Income
Many people conduct freelance work these days. From ride sharing to food delivery and more, these gigs earn income that must be reported to the government. You may or may not get a Form 1099 from the company you freelance for, but either way, you must report the income on Form Schedule C.
5. File Online
You can do just about everything online these days, from learning Muay Thai to filing your taxes. Tax software is available from a host of providers, making filing your taxes quick and easy. Taking the online route will help you get your refund much faster. The IRS estimates refunds in as few as three weeks, with direct deposit refunds usually happening faster.
Filing taxes for the first time can be a tad intimidating, but it’s far easier than you think. Use the tips above to make filing your taxes for the first time as painless as possible.
