Tax Tips for First Time Return Filers

Maybe you’re a student or you made enough money at that summer job to file a tax return, and you’re totally lost! Here are a few tips to keep in mind and get started.

First of all, make sure you even need to file! You can go to the IRS website and take a quick survey to determine if you’re eligible to file:  https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return

Keep your documents organized! This is especially important for any of you that did any freelance work or had any self-employment income (which will be reflected on Form 1099). Make sure you save those documents and make copies of any forms, important receipts, etc.

Check with your parents to see if they are claiming you as a dependent! If they have been claiming you previously and you still qualify as a dependent for them, you will need to know that information when filing. You will need to indicate whether or not someone is claiming you as a dependent on their return when filing your own.

File early or at least give yourself enough time to file! The deadline to file is around the middle of April (this past year it was the 18th). Don’t wait until the last minute to file in case there is any confusion or if you need help. If it comes down to the wire, make sure you at least file an extension. This gives you an additional six months to file (but not to pay if you were to owe anything).

Do NOT fall for tax scams! Our very own Sierra’s brother-in-law had a roommate who fell for one of these scams. She had never filed her own return before (her parents always took care of it), and received a call from the “IRS” claiming that there was a warrant for her arrest due to unpaid taxes. They asked her for over $1000 in iTunes gift cards (by the way, the IRS 1) doesn’t initiate contact by phone unless perhaps the taxpayer has reached out by phone and 2) DO NOT EVER ask for payment with iTunes gift cards!!!!). She had no experience with dealing with her taxes, didn’t contact her parents, and went right up to the street to a Best Buy and bought the gift cards.

Don’t be afraid to ask for help! Whether it’s your parent or a professional, if you are confused AT ALL, ask for help before you make an error on your return.

Use your refund wisely! You might feel compelled to spend that refund on all the fun things, but maybe put that in a savings account, pre-pay a bill you have, or invest it! It is never too early to start being smart with your money.