101 Guide For First Time Tax Filers
Doing anything for the first time can be intimidating, and it’s especially true when it comes to important financial actions like filing taxes.
Filing taxes at the beginner’s level could be a major achievement for any young grown-up. You might have taken your parents or experienced family members’ help earlier, but when it’s your turn to take responsibility for your funds and file your return, you might easily get the jitters. Even so, it only takes a little practice to master the act, and if you follow the handy pieces of advice given below, you can go through the procedure smoothly every single time.
Collect all your documents
Before you start, you need to ensure you have your:
- Tax documents that include other kinds of income,
- Tax receipts, and
Remember your previous actions
Consider everything you did in the last year that may affect your taxes, including:
- Opening another savings account
- Changing job
- Selling mutual funds or stocks
- Paying student loan interest or college tuition fee
File taxes electronically
From settling your bills to ordering dinner online, you can do almost everything from the comfort of your home these days. So why not file taxes online too? E-tax filing saves your time. All you need to do is fill out the correct forms, upload a few documents, and click a few buttons. It saves you a lot of time and eliminates the need to stand in queues or struggle with postage.
Don’t forget your alternate sources of income
A large number of youngsters earn from the “gig economy” by freelancing part-time. From being rideshare drivers to making food deliveries or working as a project manager – your gig could be anything. But if you’ve earned money from any such side hustle, remember to report your revenues while filing your taxes.
Consider tax credits and deductions
Tax credits and deductions can decrease your total tax bill and even expand your ITR, so always ensure that you take full advantage of everything you’re qualified to claim. A few basic deductions for first-time tax filers are:
- Itemized deduction or standard deductions
- Education credits including the Lifetime Learning Credit and the American Opportunity Credit
- Acquired Income Tax Credit
- Student loan interest allowance
- Home office allowance, if you’re self-employed
Choose whether your folks can still claim you as a dependent
Many youngsters get financial help from their folks, even after they’ve begun making money. You may be getting funds from them to bear with living expenditures, or they might be paying your education expenses. If this is the case, your folks may still claim you as a dependent on their ITR.
Since you’re headed towards tax filing for the very first time, it might feel a little overwhelming. But trust us, it’ll get simple. We truly hope that the above-mentioned tips would help you and reap benefits.
More in Legal Advice
Want to Retire a Millionaire? Here are Three Investing Tips You Should Live by Today
Retiring with millions in your savings and investment accounts is a dream that not many would get to live. That shouldn’t...October 23, 2020
Naomi Campbell is Still Battling it Out with an Ex-Boyfriend Years after Their Break up–Here’s Why
Naomi Campbell is no stranger to controversy whether it has something to do with her professional or personal life. And it...October 22, 2020
The Retiree’s Guide to Getting and Recovering from a Divorce Later in Life
Divorce rates among couples who are in the 60 and over age group have notably risen in recent years. This is...October 20, 2020
The First GMIT Virtual Career Fair- Why You Need to Invest Your Time in Career Fairs if You Want to Land a Job Anytime Soon
If you’re a college student or a recent graduate, you must be aware of all the career fairs taking place around...October 14, 2020
Hitting Your Diamond Wedding Anniversary but Choosing to Part Ways? Follow These Tips For a Smooth Transition Into Single Life
Divorces tend to be messy affairs. They can be overwhelming both mentally and financially. To separate from a person you had...October 13, 2020
Haven’t Received Your First Stimulus Check Yet? Here’s How You Can Find Out Why There’s a Holdup
Stimulus checks are checks sent to taxpayers to stimulate a sluggish economy. The U.S government provides some money to taxpayers to...October 5, 2020
Are You a Lawyer Just Starting Out Their Career? Here Are a Few Expert Tips on How To Get Your Career Off to a Good Start
Your law degree has finally been completed. You’ve persevered through the daunting legal training. Your name is now signed on the...October 5, 2020
Divorced or Separated? Know These Genius Hacks to Make Co-Parenting Easier and Better
Just imagine: you and your partner used to be head over heels with each other. Now, both of you want out...September 30, 2020
Don’t Take it to The Court Immediately! Simple Tips to Prevent Your Marriage from Heading to Divorceville
When sparks no longer fly, married couples head to Splitsville. Divorce isn’t always expensive but depending on how you end things...September 25, 2020