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How to File Taxes for Your First Time

Posted on March 26, 2019

young woman with headphones around neck holding a red folder.Growing up is hard, but it’s something everybody has to do. An unavoidable part of growing up is having to deal with taxes. Nobody wants to do it, but everyone has to.

If you’re young and taking your first steps into adulthood, filing taxes can be a daunting and confusing process. Even for people who have been doing their taxes for decades, it’s a big job to take on. But you aren’t alone! We've got some advice to help you successfully file your taxes for the first time.

Do You Actually Need to File Your Taxes?


Depending on your situation, you might not even need to file your taxes. If your parents or other family members pay for all or a majority of your expenses, it’s quite possible they can claim you as a dependent on their taxes. There are several deciding factors for this like:

  • You are under the age of 19 by the end of the year
  • You are a full time student under the age of 24 by the end of the year
  • You live with them for at least half of the year

If a parent or other adult qualifies to claim you as a dependent, be sure to coordinate with them. Make sure they know to claim you if you are allowing it. If they don’t claim you as a dependent, you will have to file your taxes.

Being claimed as a dependent might not be a best choice for you. If you are earning an income where you’ve been paying income tax and could get a tax return, by letting somebody else claim you, you won’t get that return. Talk with whoever could claim you and make a plan for filing your taxes.

Getting Started: Gather Up Your Tax Information


Before you can file your taxes, you need all of your relevant financial information. In a general sense, anything related to your income is something you need. The biggest and most common item is your W-2 form from your employer. For every job you had during the year, you need to get a W-2 form, or if you had a side gig like driving an Uber, at least a 1099 tax form. Even if you only worked at a job for a week, you still need proof of that income. You should get all this information by the end of January, but if you haven’t, reach out to your employers.

If you are or were self-employed and earned a significant amount of money, you are responsible of keeping track and reporting that to the IRS. Keep track of your earnings and hold onto physical records.

Finally, other relevant information can include money earned from investments, like in a savings account, and adjustments to your income like student debt and other qualifying deductions. If you have started a 401K or purchased stocks, you’ll need to report this too.

How are You Going to File?


man writing on tax forms with a penYou’ve gathered all of the information you need, so now comes the hard part. Actually filing your taxes. But good news! There are so many options when it comes to help with filing your taxes that you can find one right for you.

File Manually
If you want the experience of filing your taxes by hand, it’s still available, and it’s free. Print off the required forms, fill them out with your personal and financial information, and send it off in the mail. The biggest negative is that nothing is checking your work, so if you choose to file by hand, double and even triple check your work.

File Online
There are tons of ways to file your taxes online. If you make less than $66,000 a year, many tax software companies offer free versions for filing federal taxes, and depending on where you live, state taxes too. These free versions though will be lacking on some support options, and if your taxes are more complex, might not work for you.

Pioneer members can get a discount on TurboTax if the free version isn’t enough for you. If you are looking to maximize deductions, receiving income from investments, or are self-employed, it’s a great deal!

Hire a Professional
There are whole businesses designed around helping you file your taxes. Tax accountants and preparers work on getting you the best result from your taxes and maximizing your deductions. That could mean paying as little taxes as possible, or getting the largest return you can. You hand over the necessary information, and they do all the work for you.

The problem is, working with a tax professional isn’t cheap. Some places offer free services to get you started, or charge depending on how much work you need done. If your taxes are going to be complex, consider using a tax professional to help you. If your situation is simple with a couple of W-2s at the most, your likely better off doing it on your own.

Double Check the Work, Then Send It Off


two women talking while sitting at a tableIt’s always smart to double check your work while filing your taxes. Even if you paid somebody else to do them for you, mistakes happen. A single missed decimal point, clicking the wrong button, or adding some numbers together incorrectly could lead to bigger headaches. You might not get the return you should, or it could lead to the IRS auditing you and looking more closely at your finances.

Take some time and look over your work again. Some financial institutions and tax accountants even offer services to double check your taxes for you.

Then, send your taxes off to the IRS. If you owe money, you’ll need to pay it to the IRS. You can pay online, through the mail, or even with cash at specific locations. If you find yourself struggling to pay your taxes in one lump sum, you could always utilize Pioneer's Signature Loan to cover it now and pay it off over a few months. 

If you are getting a tax refund, it might take some time to get your money. Anywhere from a week to a month is a normal wait time. The refund will be deposited directly into an account of your choosing, and once you get it, can use it however you want.

Once it’s all done, congratulations! You’ve successfully filed your first year of taxes!

Save Money on Turbo Tax through Pioneer

 

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