How to file your first tax return
Filing a federal income tax return can be intimidating for those who are filing their first one. It’s not uncommon to hear other tax payers complain about the process, so feeling anxious is normal. It’s not as difficult as it seems to file taxes for the first-time. We’ve compiled six tips for first time tax filers. Here are a few tips to keep in mind as you prepare and file your federal income tax return for this year. One of the most frustrating aspects of filing your taxes is finding all the receipts and tax documents you have received throughout the year. If you suddenly forget where you kept your student loan interest documents, or the receipts for your medical expenses last summer, preparing taxes can become a stressful process. To keep track of your tax information, you don’t need a complex filing system. A simple box or file will do. To reduce the amount of sorting later, avoid putting unrelated documents in this box or file. To reduce the amount of sorting you will have to do later, avoid placing unrelated documents into this box or file. Keep receipts for your business expenses – big and small – if you are self employed. It’s important to keep track of all business expenses, as they can reduce both your self-employment and income taxes. Keep an eye out for items like printer ink, parking charges, tolls associated with your business and other expenses that are often overlooked. Consider keeping a notebook or tracking your business mileage electronically.
As your tax forms start arriving in January, place them in your tax file or box immediately. Avoid letting them fall on your counter or anywhere else where they could be misplaced.
2. Organize your tax documents.
Organizing your tax information can be as simple as putting your Form W-2s in one pile, your 1099 forms and other income in the next pile, and possible deductible expenses in a third pile.
If you own a small business or have self-employment income, it’s a good idea to create a list or spreadsheet to track your business income and expenses. Also, gather information on any possible tax credits such as the Earned Income Credit or Child Tax Credit. This resource will ensure you have all of the necessary tax documents prior to filing. By answering a few simple questions, you can prepare and file both your federal and your state returns with TaxAct(r). Your filing status also affects your eligibility for certain tax credits and the standard deduction amount you qualify for. Your filing status also affects the standard deduction amount you qualify for and your eligibility for certain tax credits.
The different filing statuses are:
Single:
If you are unmarried and do not qualify for another filing status (for example, you have no children or dependent relatives), you should file as single.
Married Filing Jointly
: If you are married and both you and your spouse agree to file a joint return, you can choose the married filing jointly status. Typically, couples pay less tax when filing jointly.
Married Filing Separately:
If you are married but prefer to file a separate return from your spouse, you can opt for married filing separately. This status is advantageous if you don’t want to assume the tax liability of your spouse. Some couples choose to file separately to maintain individual control over their finances.
Head of Household:
You can file as head of household if you are considered unmarried as of December 31 of the tax year, or if your spouse did not live with you during the last six months of the year. You must also have paid for more than 50% of household expenses, and have a qualifying person living with you more than half the year. Know if you are someone’s dependent. Know if you are someone’s dependent.
One of the most important things to know before filing your tax return for the first time is whether you are classified as a dependent on someone else’s tax return.
Ask yourself: Did your parents or another person pay more than half of your expenses in the past year? If you answered yes, then the IRS will generally consider you as their dependent. If you are a dependent of your parents, they can claim a tax benefit or credit. If you fail to indicate you can be claimed by someone else as a dependency, and they claim you on their tax return, the IRS could reject your return. Therefore, it’s important to talk to your parents or another relative to see if they plan to claim you as a dependent.
You can view the current rules about who can be claimed as a dependent on someone else’s tax return on the official IRS website.
- 5. Understanding your adjusted gross revenue is important. It’s your total income for the tax year, including wages, tips and business income. However, it is adjusted to remove certain expenses like student loan interest and retirement contributions. Think of it as your taxable income before claiming any deductions or credits.Understanding your AGI is important because it directly impacts your eligibility for various tax deductions and credits, as well as your overall tax liability. Your AGI is used in many calculations, including determining your standard tax deduction and qualifying for credits such as the Earned Income Tax Credit. Learn more about AGI in our comprehensive AGI guide. Look over your tax return before submitting.
- DIY e-filing makes tax preparation much easier than it was back in the day. The days of filling out IRS forms manually are over. Now, you can simply input your financial data into online tax software (like one of TaxAct’s digital or download solutions) and follow the steps to file your own taxes quickly and efficiently.However, that doesn’t mean you should just plug in the numbers and file — be sure to read your entire return! Check out our help topics if you’re not sure what you’re doing. As you file with us, TaxAct customers can also use our Refund Snapshot to get a clear picture of how specific tax deductions and credits can affect your tax refund or tax bill (amount of taxes owed).
- Building your knowledge about taxes and your financial situation can help you plan better for years to come.7. Give yourself plenty of time to file.
- Your tax return should not take long, but you shouldn’t rush it. You can start early in the year to get your return done without the stress of an approaching deadline. You have until April 15, 2025 to file your federal tax return for 2024. The IRS usually begins accepting returns before the end January. TaxAct will file your return with the IRS when they begin accepting them. You can do this as early as January 2, 2025. Mark your calendar so you have enough time to meet deadlines. TaxAct can help you request an automatic extension when you file with us. TaxAct can help you request an automatic extension when you file with us.Note:
If you end up with a tax bill you can’t pay all at once, you can set up a payment plan with the IRS (though the agency may charge you interest and fees).
The bottom line
Filing your first tax return doesn’t have to be stressful. TaxAct can help you request an automatic extension when you file with us. You can easily and confidently navigate the tax season if you are prepared. Following these tips will not only simplify the tax process, but you will also gain a better grasp of your financial situation as well as how taxes work. Are you ready to start? Start free today or sign in to your TaxAct Account to take control of your taxes. This article is not intended to provide legal or financial advice. It is only for informational purposes. All TaxAct products, services and offers are subject to the applicable terms and conditions.
