A Beginner’s Guide to Filing Taxes

When I graduated from college and started my first job, I felt like such an adult at tax time. I gathered my W-2 and my student loan interest form and dutifully did my taxes myself using the traditional paper return.

And I completely butchered it. I made many mistakes, missed out on credits and deductions and had to file an amended return months later.

Unfortunately, it’s common for first timers to make mistakes like I did. Doing your taxes on your own can be overwhelming and confusing. And if you make any errors, you can end up owing penalties and fees or miss out on your tax refund.

To avoid making the same mistakes, here’s a guide to filing your taxes the right way.

Know your deadlines

While the tax deadline is normally April 15, this year it’s April 17, giving you a couple extra days to complete your return. But if you don’t think you can complete your taxes by April 17, you can file an extension to get up to an extra six months to file your return. However, even if you plan to file an extension, keep in mind that you still must pay any taxes owed by April 17 to avoid penalties.  

Collect your paperwork

Once you are ready to prepare your tax return, collect all of your documents. Below are some of the most common forms you will need:

  • W-2: If you are either a part-time or full-time employee, your employer will issue you a W-2. This form shows how much money they paid you in the past year and how much you paid toward taxes and Social Security.
  • 1099: If you freelance, have a side-gig, or are a contractor, your clients will send you a 1099 with how much you earned.
  • 1098: If you made payments toward student loans or toward property taxes, you will get a 1098 showing how much interest you paid.
  • 1095-A: If you got insurance through the Healthcare Marketplace, the government will issue you a 1095-A form confirming you had health insurance.
  • Income or interest statements: Your bank will send you an end-of-year statement that states how much your accounts earned in interest.

  • Bank account information: To ensure you get your tax refund quickly, you can sign up for direct deposit. Have your bank account number and routing number (they appear on your checks) on hand to complete your return.

Consider your preparation options

While you can do the traditional paper return, it’s easy to make mistakes if you are not sure what you’re doing (like I did). And while there’s tax-prep software out there that can help, it can be expensive. Instead, try one of these free options:

  • MyFreeTaxes: If you make less than $64,000 a year, you can prepare and file your taxes for free with MyFreeTaxes. The software has prompts and questions to guide you through the process.
  • VITA sites: If you need in-person help and make less than $54,000, you can have your taxes prepared by an IRS-trained volunteer at Volunteer Income Tax Assistance sites.
  • Credit Karma’s tax tool: New this year, Credit Karma launched a free tax tool that allows you to file your state and federal taxes at no cost, regardless of your income.

Double-check deductions and credits

When you’re just starting out, you probably don’t need to itemize your deductions, like charitable donations or business expenses. Instead, you will likely claim the standard deduction of $6,300, which reduces your taxable income. But there are other credits and deductions that may apply to you:

  • American Opportunity Tax Credit (AOTC): If you went to school in 2016, you may qualify for the AOTC. This credit is worth up to $2,500. And if you don’t owe anything on your taxes, the credit is refundable. That means you can get money back with AOTC.
  • Earned Income Tax Credit (EITC): EITC is a valuable tax credit many people miss out on by not claiming it. But if you worked last year and have a low to moderate income, you can get a credit as high as $506, if you are single and do not have children.
  • Student Loan Interest Deduction: If you made payments toward your student loans, you can deduct the interest you paid, reducing how much of your income is taxable. You can deduct up to $2,500 in student loan interest. Your lender will send you a 1098 form to prove how much you paid last year; that’s what you include when filing your taxes.  

File your federal and state return

Once you’re ready to file, you can submit your federal and state returns online. Or you can opt to mail in the forms instead. To find out where you need to send your return, check out the IRS website.

If you are expecting a tax refund, it can take several weeks for it to arrive. You can track your refund status using the “Where’s My Refund” tool. What should you do with your refund? Consider using some or all of it to start building your financial safety net.

Managing your taxes can be overwhelming and frustrating when you’re doing it on your own for the first time. But if you prepare ahead of time and use free programs designed to help, you can complete and file your taxes and get your full refund much more easily.

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Kat Tretina is a freelance writer in the Orlando area. She is focused on creating content that helps young adults achieve their full potential, whether it's through personal finance, productivity or religious content. You can reach Kat at KTretina.com.