If it’s your first time filing your own taxes, you might be overwhelmed by the process. Read on for our guide to help you file your taxes without worry.
We live in a DIY world. People fix their own cars, install their own appliances, and make their own beer.
People file their own taxes too. Sure, it’s not as fun or glamorous as creating craft brews but they’re doing it, why not you?
Read this mini-guide and learn more about how to manage and file your taxes for the first time.
Do You Need to File?
Just because your best friend didn’t file taxes this year doesn’t mean you qualify as a non-filer too.
The IRS has strict guidelines for who must file taxes. If you’re not sure whether you must file, the government provides a nifty tax filing tool just for you.
You’ll need a few pieces of information to use the tool including:
- Your age
- Gross income
- Filing status
Filing status refers to whether you file your taxes as a single person, married person filing a joint return with your spouse, or a married person filing a separate return. There’s also the status of filing as head of household.
If you’re an independent contractor, you’ll likely file income information from form 1099 rather than a W2.
Don’t Wait for the Weekend
We all know that person who waits until the last minute to start preparing their tax returns.
This is a bad practice for several reasons. If you’re scrambling to gather your W2s, 1099s, and other tax forms you may miss an important document.
It’s not uncommon for a person to realize they never received a W2 from their employer. If you wait until the weekend before taxes are due, chances are your employer won’t get your form to you in time.
Rushing through filling out your tax forms can increase your chance of making mistakes. Making a mistake on a tax form could create a financial nightmare.
If you miscalculate money owed to the government, you end up paying penalties. Errors in taking deductions may mean you overpay. Then the government keeps more than their fair share.
Gather Your Paperwork
If you can figure out a filing system for paperwork before tax time, you’re already one step ahead of the game.
You’ll need all the records of your income. Income includes:
- Freelance work
- Social Security
For each of the above, you’ll receive a printed form. Some people also earn income from bank interest, real estate, royalties, and trusts. You’ll need receipts and documentation for those as well.
Receipts also help you calculate deductions. You’ll base certain deductions on the current value of an item (i.e. your work vehicle). Other deductions are calculated based on depreciation.
If you’re a student, you’ll receive a special form from your school showing how much you paid in tuition and fees for the year.
Now you’re ready to work through your tax return. You have a choice of electronic filing or sending in a paper return. You can even file your taxes on your mobile phone.
Take a deep breath and relax. You’ve got this!
Ready to File Your Taxes?
Hopefully, we’ve shown you how easy it is to start the process of filing your own tax return.
Figure out first whether you’re required to file your taxes. Keep your paperwork organized all year, not only in the few weeks before tax returns are due. Give yourself plenty of time!
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