Chances are you’ve already heard more than one person complain about having to do their taxes. Tax time is a stressful time for many people, especially when they know they’ll likely have to pay a bill. If this is your first time filing taxes, you may be feeling intimidated by all the negativity surrounding the task. It’s normal to feel this way, but you’ll likely find that filing isn’t as bad as you’ve assumed.
All you need to do is remember a few basics. Below, we give you the tips you’ll need to navigate your first time filing a tax return.
1. Don’t Wait Until the Last Minute to Do Your Taxes
Whether you’re wondering how to do an online tax return, or you’re simply feeling overwhelmed by all the sections you have to fill out, don’t wait until the last minute to get started. It probably won’t take long to complete your return, but the last thing you want to do is rush through it. Doing so may cause you to miss something, which can lead to delays.
The filing deadline in the US is usually mid-April, although the government makes concessions from time to time depending on the nation’s general economic circumstances. If you don’t think you’ll be able to finish completing your tax return on time without rushing, request an extension to give yourself more time.
2. Collect Tax Documents Early
One of the most stressful parts of doing taxes is making sure you have all the necessary documents, such as receipts, W-2s, and financial statements. Ideally, you’ll want to start collecting these documents in a central location where you can easily find them when it’s time to do your tax return. As these documents come in, store them in your tax folder (bonus points if it’s digital) so they don’t have a chance to get misplaced. When tax time rolls around, you’ll be less stressed and better prepared to get those taxes done!
3. Get Organized First
Having a tax folder is all well and good, but if it’s a disorganized mess, it will make tax time more stressful than it needs to be. Sort all your receipts and documents into relevant categories. You may also wish to keep a spreadsheet throughout the year that includes all your income and expenses for easy retrieval come tax time.
4. Talk to Your Parents about Your Dependency
If you live with your parents and they’ve paid more than half your expenses over the last year, they are likely going to claim you as a dependent on their tax return. This gives them an exemption that puts more money in their pocket. If your parents claim you as a dependent, you cannot take the exemption yourself on your tax return. Be sure to discuss this important fact with your parents before starting your taxes, as the IRS will notice if you both take this exemption.
5. Understand Your Filing Status
Your filing status is important as it determines your tax obligation. If you’re not married and have no children, you’ll want to file as single. If you have children and pay more than half the housing costs, you may want to file as Head of Household.
If you’re married, you can file as married filing jointly with your spouse, or if you don’t want to be responsible for your spouse’s tax obligation, you can select the “married filing separately” option.
Many people complain about tax season, which can make first-time tax filers feel intimidated. By following these tips, however, your first-time filing won’t be as bad as you think.
