Filing your taxes is not only confusing, but it can be a daunting tax to take on as well. If this is your first time filing your taxes, there are some things you need to do and take into consideration first before you start filling out the forms.
Below, we will go over some of the considerations and steps you need to take as they will help you decide whether it is the right time for you to file on your own.
You cannot file your tax return effectively if you are not organized. You need to take some time and collect all of the tax documents you have received in the mail and place them in a designated spot.
You should also keep track of what does come in so you know what you are left waiting for. Once the documents arrive, you can begin going through them and prepare to file.
If this is your first time filing, you may not know what to do with your 1099s and W-2. This is common and you do not need to panic. If you choose to file on your own, follow the steps provided on the website you plan to use. The website and software will typically tell you what box to look in on your tax forms.
If you find the process is too overwhelming, you can call a tax agent and schedule an appointment to go over your documents.
If you are still in school or fresh out of school, make sure you talk to your parents before you file your own taxes. If your parents claim you as a dependent on their tax return and you file an individual return, you both may face penalties.
Typically, if your parents are able to claim you on their taxes, you cannot claim yourself anyways, but it is always wise to check with them first.
In addition to who plans to claim you, it may be more beneficial for you if your parents do claim you over you claiming yourself. If you need more help understanding your personal situation, you should speak to a professional tax preparer.
Once you have figured out whether you are filing or your parents are claiming you, you can begin looking up some of the tax credits and deductions you may qualify for.
For instance, if you are a full-time college student, you may receive a tax deduction for any interest you have paid on your student loans, etc.
You never want to leave money on the table when it could be in your pocket or when it could bring own your taxable income.
First-time filers do not need to rush around and you need to take your time through the process. It is essential that you never rush through the paperwork as you may make a costly mistake.
Once you have completed your tax paperwork, take time to look over it and verify all of the information you input.
Although you do not want to rush when it comes to your taxes, you also do not want to wait until the last minute. As a first-time filer, you will find that you run into questions you need to research or you may find that you do not have an item you need. If you wait until the last minute, you will not be able to complete your taxes on time.
When the time comes, you will need to choose how you want to file your taxes. You can choose to file electronically or you can mail in a paper application. There are pros and cons to each and it is your decision as to which works best for you.
You will receive your refund quicker when you file online, but you may find that there are many tax scams online, so triple check to make sure you are working with a reputable and known company.
Your taxes are important and you must file them in order to receive a refund and comply with the law. If you do not file a return and you did make money throughout the year, the IRS will contact you and charge you penalties.
