Tax Tips for First-Time Filers
It's natural for first-time tax filers to feel anxiety. After all, you've heard friends and family members talk about how much April 15 stresses them out.
But it's best to relax, take a deep breath and realize you're probably getting money back, says Bob Meighan, vice president of customer advocacy for online tax preparation service Turbo Tax®.
"As a first-time filer, it's not a time to stress," Meighan says. "In fact, this is probably a time to rejoice. The average taxpayer last year got a refund of about $2,700. I realize that may not be what everyone will get, but more than likely it's going to be a significant chunk of money in the four digits. They should be thinking, 'Wow, here's my opportunity to claim back money that the IRS took from me.'"
The Internal Revenue Service's Form 1040EZ, used by a large percentage of first-time filers, is not difficult -- and it's available for download. As the name suggests, it's the shortest and simplest form.
Filing becomes even easier when you think about doing your taxes as a financial recap of the year. Your filing is a summary of all that happened last year. And no one knows that information better than you.
What's more, new filers have all kinds of online and software tools to fill out returns without the stress and frustration that taxpayers suffered before the digital era.
"There are great, free software solutions for many first-time filers who have lower incomes," Meighan says. "They shouldn't have any problem finding something simple to satisfy their needs."
Meighan offers additional tips for first-time filers:
- Get organized: First-time filers may not need anything more than a year-end W-2 statement from their employers -- and maybe a statement from the bank that shows total interest earned last year. Put those important documents aside for when you're ready to start your return.
- Investigate deductions: Certain deductions on things such as student loan interest and education expenses may be available, and some of those can be claimed without itemizing. Some new filers think they'll never get to $6,200 as a single taxpayer for itemized deductions, but that might not be true. There might be some beneficial deductions and credits available to you now.
- Use e-file and direct deposit: Getting a refund? Good for you! Get it faster by filing your return online and directing the Treasury Department to put the dough right in your account. "E-filing with direct deposit of your refund is the quickest and most secure way of getting your tax refund," Meighan says.
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