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An Easy-to-Understand Guide on How to Do Your Taxes For the First Time
by
taryn shelby
Getty / Nora Carol Photography
If you’re getting ready to do your taxes for the first time, congratulations, and we’re sorry! You’re now a member of one of the most annoying clubs to ever exist. For first-time filers, tax season can be confusing and overwhelming when you hear things like “deductible” and “W-2,” but there’s no need to freak out. We’ve put together a handy little guide that will give you a better idea of what to expect when filing your taxes and how to get started (even though you’ll definitely, probably still call your parents for help). So, sit back, stress out, and read up on everything you need to know about filing your taxes!
Related: How to Know If You Should Hire Someone to Do Your Taxes
Unsplash / Kelly Sikkema
Make Sure You Have All the Required Tax Documents
First thing’s first: turn on our Tax Time playlist to set the mood that you can frickin’ do this. Next, locate all your tax documents. Depending on how you generate income, you’ll work with any number of the following forms that can be found in your mailbox, email, or online accounts:
- W-2: reports salary and tax contributions from part- or full-time work
- 1099-MISC: reports income earned from freelance work or your side hustle
- 1099-DIV: reports dividends and distributions from investments
- 1099-INT: reports bank interest
- 1098-T: reports tuition payments
- 1098-E: reports student loan interest payments
- 1095-A: record of qualifying Healthcare.gov coverage
- Expenses and Receipts: supports itemized deductions
- Bank Account Routing Number: to set up direct deposit for your tax refund
Pexels / Maureen E
Choose a Tax Preparer
In 2020, it’s easier than ever to get your taxes filed quickly and at a reasonable cost. (Yes, you read that right. We pay to pay taxes.) The first time you file, it’s best to go with a trusted adviser to avoid any costly mistakes. The good news is they handle all of the confusing work, and there are plenty of options:
- Tax Prep Software: TurboTax, TaxSlayer, and H&R Block
- Professional: Certified Public Accountant (CPA) and IRS Enrolled Agent
- Free Low Income: IRS Volunteer Income Tax Assistance (VITA)
Pro tip: Don’t wait until April (April 15 is Tax Day, which marks the official deadline for filing) to schedule with an accountant as appointments book up quickly. The sooner the better!
Pexels / Acharaporn Kamornboonyarush
Fill Out the Form
The tax preparer (bot or human) will help determine the appropriate tax form for you. As a first-time filer, it will likely be the 1040EZ. You will manually input or digitally import your aggregate income, credits, and deductions. Deductions lower taxable income, and credits reduce the amount of taxes you owe. Each section will be calculated to conclude whether you can expect a tax return or a tax bill. May the odds be ever in your favor.
Pexels / Tranmautritam
Relax and Wait For Your Refund . . . Or Pay Your Bill
You filed and paid your federal taxes – congrats! (Don’t forget to file state taxes if applicable to you.) Becoming a taxpayer is a mundane coming-of-age experience that few people find enjoyable, but if you’re owed a refund, then all of the annoyance is worth it. Now get back to living your life, and try not to spend that tax refund all in one place!