Nothing says you’ve reached adulthood quite like filing your taxes.
It can be a formidable task even for the most seasoned of tax-payers, but it’s not as complicated as you might think.
As it’s our job to provide tax preparation help, we’ve aggregated five quick tips to help you get started.
First things first…
What Is A Tax Return?
Each year, you must estimate how much you owe the government or how much they owe you based on the income you’ve earned and the taxes you’ve paid throughout the year. This is your tax return.
Without further adieu, onto the tips!
1. Definitely File A Tax Return
There are instances when you wouldn’t need to file a return, such as if your income falls below the standard deduction ($12,000 for single filers) or someone else claims you as a dependent.
However, if you had too much tax withheld from your pay or you qualify for tax credits, for instance, the only way to receive a refund is to file your taxes.
2. Have Your Tax Information Handy
Items like proof of income, tax-deductible expenses, and evidence you’ve incurred income taxes are necessary for filing your taxes.
You should have this information on-hand:
- Social Security Numbers for you, your spouse, and dependents
- W-2 Form, which indicates your earned income and the taxes you’ve paid over the year. If you had more than one job, you should have more than one form
- 1099 Form, which indicates sources of income other than your employer
- Proof of deductible expenses like:
- Out-of-pocket medical bills
- Education expenses
- Retirement account contributions
- State and local taxes
3. Know the Right Forms for Filing Your Taxes
The main one you need is Form 1040, which is used to report income and claim tax deductions and credits. To claim certain tax deductions and credits, there are other forms you might need to file.
4. Prepare Your Taxes Early
The best way to ensure you file your taxes correctly and on time is by getting a head start.
If you don’t pay your bill in full by the April deadline, the IRS charges interest on the outstanding amount. On top of that, you may also receive late-payment penalties. Even if you can’t pay your bill in full, send your return to avoid a late-filing penalty.
5. Reach Out To A Tax Professional If You Need Help
Even if you take all the correct steps, it doesn’t hurt to receive confirmation from a tax professional. They may even find opportunities for tax breaks you didn’t know you qualified for.