Tax Tips for First Time Filers
Filing a tax return for the first time can be very intimidating and oftentimes, college students and those who are working for the first time are uncertain as to what process they should follow. There are some things you should do prior to filing your taxes for the first time and some precautions you should take including:
1. Discuss your taxes with your parents
Before beginning a tax filing, you need to determine if your parents can and intend to claim you as a dependent on their tax return. If they can do so, you may still file your tax return but you will be unable to take a standard personal deduction.
2. Gather the proper documents
Remember, if your parents are not claiming your education expenses you can claim those expenses on your tax return. You should gather your tax forms from employers, documented school expenses and any other income or expense information that may be deductible.
3. File the right tax form
You may need to discuss which tax form you should file with a tax professional. Just because this is the first tax return you have filed does not automatically mean you will be able to file a Form 1040EZ. Remember, the Internal Revenue Service (IRS) has established guidelines over which forms may be used by which taxpayers.
4. Maximize deductions and credits
There are various deductions and credits you may be entitled to take on your tax return. For example, if you contributed more than half of the support of a person, they may be considered as a deduction. You may also be entitled to tax credits for earned income and certain credits for educational expenses you may not be aware of. A tax professional can help you by asking the right questions and understanding your circumstances.
5. Do not wait until the last minute
Tax filings can be complicated and while April may seem a long way off, in most cases, the sooner you prepare to file, the better off you will be. Not only will getting prepared early allow you to consult with a tax professional to get answers, if you are entitled to a refund, you may be able to get the refund earlier if you file early.
6. Double check everything
Even if you have hired a professional to prepare your taxes, make sure you do a thorough review of your return. Simple math mistakes can hold up a refund and cause you problems later. Signing and dating your return is critical or your return may be sent back to you for modification.
A first-time tax filer has several hurdles to overcome including being wary of a process they are not familiar with. Rather than try to do your first filing on your own, consider contacting a tax preparation specialist at Rue & Associates. We provide a broad range of tax services to residents in Central Virginia including Mechanicsville, Richmond, Hanover, Henrico and surrounding areas. Call our offices today at (804) 730-7455 or contact us through our online contact form.