Welcome to the adult world to those of you who need to file taxes for the first time. You may have used your parents or their accountant in years past, but we all must go it our own sooner or later. For those of you in this category, here are a 4 tips for filing taxes for the first time.

1. Do I Need to File Taxes?

You need to file federal taxes if your income goes over a certain number. For example, those of you filing as a single taxpayer must file if your yearly income exceeds $15,570. This number changes for those of you who are married and filing jointly, or married and filing separately. Each state also has its own process for filing taxes. However, it may be worth the effort to file at the federal or state level even if you make less than this due to the numerous credits, deductions, etc. Consult your bookkeeper or tax preparation professional to determine your best route.

Did you know? Approximately 48% of electronically filed returns were done by a tax professional? Source: Forbes

2. Gather All Your Tax Documents

Your employers generally have until January 31st to send you any tax documents, including for income such as a W-2 or 1099. You should have many others in your possession such as:

  • Your Social Security and/or EIN number.
  • Banking and app information for any and all income.
  • Information on any qualifying expenses such as tuition and other educational expenses, medical costs, charitable expenses, and more.
  • Information on any dependents, or knowledge as to whether you will be counted as a dependent.

You can and should also create an account at irs.gov in order to keep track of all your relevant information.

3. Determine Credits and Deductions

The good news is many benefits are available for those who file for the first time. For example, the American Opportunity Credit offers up to $2,500 in credits to college students who qualify. The Lifetime Learning Credit reduces tax liability depending on how much you spend for tuition, fees, and other eligible costs. You can even deduct some of the interest on your student loans. We recommend consulting a professional in order to get the best possible return.

4. Determine how to file Your Taxes

Once you have determined your best possible tax burden, it is time to file. There are several ways to do so. The oldest is to file your tax return by mail. It must be postmarked by April 15th or whatever day tax day happens to fall on in your year. However, we don’t recommend this as your return may be lost, be illegible, and takes longer to process. You may file yourself electronically on IRS.gov. However, this method is best left to professionals as it can be complex. You may also file using a software such as Turbo Tax or other. The good news with these tools is that you don’t have to pay until you file, so you may try several to see which gets you the best return. Finally, you may use a tax return professional. We recommend this for those who are filing for the first time. This way you can be sure it is done right and that you are getting the best outcome possible.

Filing Taxes for the First Time in Houston

Do you want to make sure you file your first tax return correctly and live in the Houston area? Contact us to get tax return help Monday through Friday and even on Saturdays too until after tax time.