Source: TurboTax - Intuit
Tax season will soon be here and we’re sure you’ve already seen a few tax posts floating here and there on our blog. This could be your first time filing for taxes and you’re just looking for some easy tips to navigate you in the right direction. I filed my taxes for the first time last year so here are a few tips that I can offer for all the first timers out there.
This is a simple first tip, but if it’s your first time filing for taxes, it is really not as bad as you think. With a few simple steps, some clear cut planning and preparation, you’ll soon have it out of the way. Also keep in mind that this year's tax deadline is on April 18th!
TurboTax, H&R Block, TaxAct, and e-File are a few trusted tax software programs we frequently use and they also offer great software discounts every year. You can save up to 50% off on your taxes with our offers.
Tax filing is all about having the right documentation and knowing what you need to bring on the day of. Beginning late January to early February, you should be getting your W-2 (or alternate tax forms) back from your employer(s).
The W2 will show you the amount of taxes withheld from your paycheck for the year and typically used to file your federal and state taxes.
Bonus Tip: We highly recommend double checking to make sure all your personal information is accurate. Both your name and social security number are used to track your income, which the IRS will match with your employer’s corporate tax return. If the information is inaccurate, the IRS will not be able to track you which could result in an unfiled tax return status. If you need to update your W2 information, we suggest doing so ahead of time or simply let your employer know.
Besides your employer tax form(s), you can also bring in any additional tax forms you may have with you. If you’re still in school, make sure you also bring in your deductible student loan form listed on 1098-E or any records of contributions to an IRA.
For your own record, you should also keep a list or receipts of deductible expenses.
They should know! They’ve filed taxes for how many years? They’re sure to have some valuable advice, plus they’ll also have a good recommendation as to where to file your taxes in the local area (if you're planning to file traditionally). Additionally, there are some issues that arrive with personal tax breaks. If you work enough to file a Form 1040 and your parents are claiming you as a dependent, there could be a conflict dealing with personal exemptions. If your parents claim you as a dependent then you won’t be able to claim a personal exemption. To avoid this situation, you can have a talk with your parents or visit a financial advisor to determine the smartest way to file for both sides.
After you have all your organized forms together, now, it's time to decide how you should go about filing taxes. An easy way to file is using tax software. You’re probably not up to date on the entire tax code (nor do you want to be) so in order to make sure you’ve checked up on all tax deductions, credits and essentials forms that are available, tax software could be the way to go. The latest tax software will always be up to date with any tax law changes.
Additionally, filing using tax software can guarantee mathematical accuracy and you can be sure you don’t miss out on any qualified deductions. A nice bonus with filing online is that if you file with direct deposit, you’ll get your refund within 21 days of acceptances compared to up to 8 weeks for traditionally paper-filed taxes.
You don’t have to pay to file taxes. Everyone is eligible to use the IRS tax filing software at no cost so long as your annual household income is $62,000 or under. This government resource is free whether you are planning to file a Form 1040, 1040EZ or 1040A. You can check out their guide to documentation needed to help you get started and it's available in multiple different languages.
There are a few different tax deductions that you should not overlook if you’re a first-time filer. These common deductions include education such as student loans, business mileage, job-related moving expenses, contributions to qualified retirement accounts and much more. You can find more above-the-line deductions listed on the IRS page and click through for more detailed information and resources. Here are some interesting infographic guides we found for your benefit:
Apparently, you can also deduct body oil, bariatric surgery and deer meat?! Some qualifications must be met of course but still.
Certain states have an odd tax exemption so you might want to take a look (get $50 for donating a dead deer to the poor in South Carolina?):
Phantom Tax Break: Medical Bills?
Get ahead of the game when it comes to filing your taxes. Go back to step 1 and start gathering all necessary documentation. Keep track of certain life events where you can potentially earn a tax break and organize those forms and receipts so you have everything ready to go when you file. Don’t let tax filing intimidate you into procrastination, take control and plan ahead for a more rewarding experience.
The feeling that comes with getting your taxes properly filed and accounting for all deductions is an empowering one (adulting done right anyone?). We hope you found the above helpful in getting you off to the right start this year. Also, don’t forget to sign and date your forms after you’re done filling and make sure you keep a digital or physical copy of your return.
If you haven’t gathered already… our community of deal hunters is a huge fan of saving money and learning how to live frugally. We welcome any tips and topics so if there’s a subject you would like to learn more about or expand on, let us know in the comments below! Help us help you.