Filing taxes for the first time is complicated. More often than not, it takes attention to detail and a lot of patience to get through the process. However, once you have a basic understanding of filing taxes and are familiar with the terms or how to get started, the entire process will be a breeze for you.
To ease your worry about filing taxes for the first time, below are some of the things you should know to get the best possible results:
Consider Relevant Tax Credits And Deductions
Are you wondering what can you claim at tax time? One of the things you should know about filing your taxes for the first time is the tax credits and deductions. Such can lessen your tax bill and increase your refund. So, be to take advantage of everything you can claim.
Some of the common tax credits and deductions that first-timers can enjoy may include:
- Home office deduction for self-employed individuals;
- Earned income tax credit;
- Student loan interest deduction; and
- Education credits.
To make the most out of tax credits and deductions, make sure to research the rules to claim them and to determine whether or not you’re eligible.
Know When To File Taxes
Are you aware of the fact that you don’t have to file taxes if your income is below a particular limit? The lowest income to file taxes will change based on various circumstances, such as age, filing status, and income.
Basically, taxpayers should file if their income exceeds the minimum. However, if taxpayers are one of the dependents of another taxpayer, they’ll have a low filing requirement.
If you’re a business owner and you don’t want to experience any hassle about when to file taxes, you can benefit from using the best accounting and taxes program in the market. This is especially true if you’re just getting started in your venture and want to avoid future tax problems
Prepare Everything And Start Early
Another thing to know when filing taxes for the first time is to prepare everything and start as early as possible. Take note that you only have until May to do your taxes. Depending on your preferences, you can prepare yourself by getting advice from those who have done it several times, like a tax professional, legal experts, or your parents.
Gather Your Tax Documents
If you want to get a refund, you should file your tax returns as soon as possible. You’ll receive essential tax documents in your email or mailbox early annually. Before you start, collect all the necessary documents for filing taxes. These may include receipts, tax deductions, and tax forms that report income, and so on.
If you decide to file your taxes without such forms, you may have to amend your tax returns later. You should also spend more time thinking about what you did in the past that may impact your taxes, including selling mutual funds or stocks, changing jobs, paying college tuition, and opening a savings account.
Take Note Of Your Deadlines
Having tax documents early provides you a few months of preparing your tax returns by April 15, which is the usual due date. With this in mind, be sure to plan the date when you’ll begin your return and ensure that it’s still early enough that you can plan another session in case you have to spend more time getting help or locating more documents.
Generally, tax experts highly recommend filing tax returns earlier than later. If you file earlier, the better your chances of preventing any possible tax-related identity theft, which is a crime that’s becoming popular these days. Moreover, if you owe a refund, you’ll get it sooner.
If you need more time to file, you may file an extension providing you a few months to submit your tax return, typically in October. However, if you owe money from the government, you have to pay tax liability by the due date to avoid interest and penalties. If you don’t have enough money to pay for everything you owe, don’t hesitate to contact the Internal Revenue Service (IRS) for payment plans.
At present, you can do almost everything online, and filing your taxes is one of them. As a first-timer, you can save more time from considering online tax filing. Just make sure to work with the best tax service providers to help you get through the process smoothly and ensure that you claim the deductions or credits you’re eligible for.
Don’t Forget To Date And Sign Your Tax Return
Forgetting to date and sign your tax return is a common mistake most first-timers make when filing taxes. So, make sure to always remember to date or sign your tax returns to avoid any inconvenience in the long run. To eliminate this mistake, you can also do your taxes online with the help of a tax service provider to learn how to file your tax obligations correctly.
For first-timers, filing taxes is never fun and can be a nerve-wracking experience. But, there’s nothing to be scared about if you’ll keep the above things to know. It’s also a good idea to call a tax professional or take advantage of a reliable tax service provider to check your documents and to ensure that you’re doing the proper way of filing your taxes.