Congratulations, you are a taxpayer! This is an exciting but understandably stressful time in life. Typically first time filers are younger folks who have been claimed as a dependent on their parents’ tax returns in the past. Whether you’ve started your first job, moved away from home or are simply eager to be a taxpayer, there are some important points to be made for new filers.
IRS regulations require anyone earning more than $6,300 a year (as of this writing, subject to change) to file a tax return. But if you earn less than this amount, it may still be in your best interest to file a return. This is because most jobs automatically take taxes out of your paycheck (withholdings). If you only work part time, you may have had more money taken out of your check than you actually owe, in which case the IRS would owe you a tax refund. Yes, half the fun of doing taxes is seeing if and how much money you’ll be getting back from the Department of the Treasury. Your employer(s) should send you a W-2 or 1099 (for contract employees) shortly after the new year for the prior year’s earnings.
Keep in mind that you can file your taxes for free with the IRS, whether online, by phone or through the mail. However, there are several software and online applications that make taxes easier to file and easier to understand. If you are considering one of those options, know that a TurboTax coupon or similar can reducing the cost of filing back down closer to $0. If you are a first time filer, this option may suit you as the software explains what each deduction is and why you may want to use it.
And of course, don’t forget to sign and date your tax return. It won’t be accepted by the IRS otherwise, and you may find yourself in a precarious position.