There are a few different things in life that can seem daunting when you do them for the first time. From buying a home to starting a business, there are a variety of things we do that may be confusing the first time we try to do them.
For example, filing taxes can be quite overwhelming if you’ve never done so before. There are a variety of factors that can impact whether you owe the IRS or whether you’re qualified for a tax return. To help anyone who is preparing their taxes for the first time, consider this guide for reference so you can achieve the best outcome.
First Things First
The first thing to consider when you want to file taxes is that you’re going to need to do some groundwork. If you try to get everything ready on the due date, you’re certainly going to find yourself in a pickle. This means making sure you have all the proper documentation in place long before you sit down to file your taxes with professional tax prep software.
If you want to avoid making mistakes and having to amend forms after they’ve already been sent in, get your forms in order and take the time to make sure you have all the proper receipts for the expenses you’ll report. Making mistakes on your taxes can cause all kinds of issues, so it’s best to make sure you have everything ready BEFORE you need to file. Even if you just did some side gigs, get the numbers right on all of your income streams so you can be sure you’re reporting everything correctly.
Take a Look at Deductions
If this is your first time filing, chances are that you’re a student or could qualify for various credits. Some things to look at if you’re a student, or it’s your first-time filing, are deductions and credits like:
- Student loan interest
- Credits such as the Lifetime Learning Credit
- Earned Income Tax Credit
Aside from these common deductions and credits, you may also be eligible for a home office deduction if you’re self-employed and work from home. There are also things like standard deductions and itemized deductions that relate to items like meals, office supplies, equipment, etc.
Consider How You File
There are a variety of ways to file. You can print and mail your form to the IRS, making sure to use the correct postage and addressing it to the proper location. Or you can avoid any mistakes and file online with a professional service. If the idea of filing your taxes on your own just seems too overwhelming, consider hiring a tax professional who can help ensure you get the best results on your return.
We can’t stress this enough: meeting deadlines is very important when it comes to filing taxes. If you don’t file your tax return on time—which is typically by April 15th—you may be subject to penalties. To avoid this issue and more, it’s best to get started on taking care of all the necessary paperwork, etc., as early as February. The best way to ensure you meet deadlines is to plan ahead.
Additionally, if you’re self-employed and owe taxes, you’re going to want to make that payment before the due date to be sure you get it in on time. You may be required to pay an estimated quarterly tax, in which case, you’re going to want to schedule those payments so you can avoid penalties as well.
In Conclusion: Get Organized
There are many things that one may procrastinate and put off in life, but taxes should never be one of those things. The more organized you are when it comes time to file your taxes, the better. You’ll be able to file them knowing you didn’t make any time-consuming mistakes, get the best you can in terms of deductions, and have the certainty you’re avoiding fees and getting an optimal tax return if that’s what you qualify for.