If you’re a young person who’s never filed their taxes before, you might be a bit intimidated by the prospect of completing all the paperwork and submitting your return. However, filing isn’t as bad for first-timers as you might expect—as long as you have a general sense of the basic information you need to know, it should go just fine.
With this in mind, here are some tips from a certified public accountant in Hayward, CA that can help you get through your very first tax season without having to stress too much.
Collect certain information and documents as early as possible
One of the most frustrating parts of filing taxes is having to locate all the required documents and receipts you’ve accrued throughout the year that can affect your taxes. You should be sure to plan ahead a bit to make your life a whole lot easier as you work on your taxes. You don’t need a sophisticated receipt filing system—a single file or box that holds all your receipts is fine. Just make sure that box is solely dedicated to tax documents and receipts you’ll need later on.
Start off by saving receipts that can get you tax deductions and credits. If you’re self-employed, you’ll also want to save all receipts for business expenses.
You can then organize all this information in a simple manner, such as by putting all your W-4 forms in a pile, your income in another pile and your potential deductions and expenses in another pile.
Determine whether you are someone else’s dependent
Young taxpayers who are going through the filing process for the first time could very well still be the dependent of another person. If your parents paid more than half of your expenses for the last year, you’d be considered their dependent for tax purposes, which would affect both of your tax returns. Make sure you communicate with your parents about this.
If you’ve never filed your taxes before, you’ll need to determine your filing status. If you are unmarried without children or dependents, then you file as Single. If you have children or other dependents but are unmarried, you may be better off using the Head of Household designation. If you’re married and reside with your spouse, you will choose Married Filing Jointly. Otherwise, some married couples choose the Married Filing Separately option, which typically occurs if you keep your finances separate, or if one of you will have a much larger tax liability than the other.
Get started early
Since you’re a first-time filer, you’re going to want to give yourself plenty of time to complete your taxes so you don’t have to feel like you’re rushing. Get started early in the year so you can get everything done without having to feel like you’re up against the deadline.
For more information about the steps you should take when filing your taxes for the first time, contact a CPA in Hayward, CA at Menjivar & Company CPAs, Inc. today.
Categorised in: Tax Preparation