Nearly everyone dreads tax time, but first-time filers are usually apprehensive. However, taxes must be done, and it’s important not to be overwhelmed and to approach this task in the most positive manner possible. For most first-time filers, filing actually shouldn’t be too difficult. It just takes an organized approach and a commitment to being thorough.
Often, first-time tax filers might have a vision of piles of papers filled with complex numbers, and a very frustrated filer smashing a calculator in rage. If you happen to be a 15-year-old who just sold his or her startup, this might be the case. However, you will likely have an easier time, and should simply start with a 1040-EZ form. This form is traditionally seen as the easiest to fill out, and tends to be less work intensive than the longer 1040-A and 1040 forms. The 1040-EZ form is usually appropriate if you don’t have children or dependents and don’t own a home.
If you’re filing a tax return for the first time, it’s likely you received a W-2 form from your employer. This may be your main tax document, but it’s important to keep organized. That means saving all paper and digital copies of your tax documents, which could also include investment account information, receipts you have for charitable donations, and 1099 forms related to miscellaneous income or dividends.
Performing Your Tax Return
It’s important to review all the tax boxes for each tax document you received. As you proceed with your tax return, these boxes should correspond with 1040-EZ or other tax form boxes. Be sure to match up this information and take the time to make sure you’re entering tax figures accurately. Remember that you will also have to file state tax returns, and even if you use free software, you will sometimes get hit with an extra charge for filing taxes to the state.
Saving Yourself Money
You may be eligible for deductions depending on your financial situation. First-time filers may benefit from student loan interest deductions, which allows you to deduct up to $2,500 in 2015. However, there are also tax credits related to helping you get started to save for your retirement and also tax credits related to your college education. Be sure to take all deductions for which you’re eligible.
Use the Right Software
If you made under $60,000 during the year, you are likely eligible to file for your return for free. Use the IRS’ great Help Me Find Free File Software search option. All you have to do is provide basic information like your age, income and information such as if you were in the military or have dependents. From there, you should be matched with free software that fits your needs.
Ultimately, if you worked a standard job like most first-time filers, you likely had a certain portion of your income withheld during the year. The good news is that most first-time filers will likely receive a refund on their tax return, providing you with extra incentive to get started filing your taxes now. The simplest way to file is now online; TurboTaxallows you to file your federal taxes for free. TurboTax walks you through each portion of your return, making sure you file correctly, double-checking each step. Make sure to file by April 15. Here’s a full TurboTax Review you can take a look at to learn more.