Preparing your taxes for the first time isn’t exactly fun.
The good news, though, is that it doesn’t have be scary. We hear horror stories, but it’s not as bad as all that.
A little knowledge goes a long way. Before you get caught up in a worry spiral, here are a few things to know about preparing your taxes for the first time:
There’s plenty of free tax help available.
First of all, realize that there is plenty of free tax help available to you.
If you live in a college town, there’s a good chance that you can get help from students in the accounting program. Many business departments encourage students to prepare tax returns, and their instructors double-check their work.
Also, see if your local area has a VITA program. These sites help you prepare your taxes if you make $54,000 or less. It’s a good way to get another pair of eyes and some solid support for your tax prep needs.
You can even file your taxes for free.
If you’re doing your taxes for the first time, there’s a good chance you qualify to file for free. Assuming your household income is less than $64,000, you can take advantage of Free File.
Well-known companies like TurboTax and H&R Block participate in Free File options. Plus, depending on your state, you might even get free help filing your state taxes.
You don’t have to itemize for good tax deductions.
When you hear words like “itemize,” you probably zone out. The good news is that you probably don’t have to worry about itemizing when preparing your taxes for the first time. You won’t even miss out on some pretty sweet deductions, either.
Some of the deductions you’re most likely to take this go are on the first page of your Form 1040. These include:
- Moving expenses (if you move for work)
- Student loan interest
- Tuition and fees
- Portion of your self-employment tax (if you have a side gig)
There are other deductions you can take without itemizing, such as contributions to your Health Savings Account and to your Traditional IRA.
You can keep digital records.
It’s possible to prepare your taxes with the help of your phone. On top of that, you can keep digital records of your receipts and other records you might need. An app like Shoeboxed can help you manage everything digitally, so there’s no need to mess with paper.
Just scan everything or snap a picture and manage it digitally so you can streamline the process. It makes things easier, whether you’re filing taxes for the first time or the tenth.
File an extension if you need to.
Stressed about getting everything done by April 15?
Slow down, take a deep breath. Then file an extension. The last thing you want to do is rush through the process and make unnecessary mistakes.
While filing an extension doesn’t protect you from paying if you owe (but, really, if this is your first time with taxes, you probably don’t), but it can give you time to get your shit together.
It’s much less stressful to file an extension than try to get everything done on time if you’ve fallen behind. And you don’t even need any special reason to file for an extension.
You’ll feel better in the future if you plan ahead and manage your taxes as you go through the year, but for now, file that extension if you feel the pressure to get done on time.
Stay away from scams and refund anticipation loans.
Even seasoned tax filers sometimes make poor decisions — and that includes getting scammed.
Watch out for tax preparers that are willing to fudge the numbers a bit or claim that you are “guaranteed” something before they even know your situation.
Stick with the old standbys when you first file your taxes. Reputable and well-known tax prep software, or those retail tax prep places are usually good bets for tax filing virgins. As your situation becomes more complicated, you can start looking for more tailored advice.
While you’re at it, watch out for people who will “accelerate” your refund. In most cases, those are costly loans that come with huge fees.
The truth is that, even if you are doing your taxes for the first time, you can get your refund fast by filing electronically and choosing the direct deposit option. You don’t need an expensive loan to get your refund quickly.
Double-check everything before you send it in.
Before you send in your return, make sure that you check everything.
Even if you trust your tax preparer, look over everything. If you find a mistake after hit send, you have to file an amended return, and that is a real pain in the ass. You can only file an amended return in hardcopy.
Whether your doing taxes for the first time, or you’re an old pro, take a few minutes to review your return, and see if it makes sense. You’ll be happy you did.