Filing Your Taxes For The First Time: 5 Things To Consider

by Leon on March 10, 2014

what to do when you cannot afford to pay your taxesThere’s no doubt about it: filing taxes can be a daunting task. This is especially true for those that have never done it before. With pages of paperwork to contend with and tons of tiny blanks and boxes to fill in, you might wonder if you’re taking some kind of entrance exam. In a way, it could be considered one of many that pave the way to adulthood. But you don’t want to risk failure since it could lead to fines, an audit, or other penalties. And you need to understand which types of deductions or oversights could raise red flags with the IRS, giving them a reason to audit you. There’s a pretty steep learning curve associated with filing taxes, and you don’t want to fumble your first time out the gate. So here are a few things to consider before you send in your tax return.

Call the IRS. While it’s easy enough to download the documents you’ll need from the IRS.gov website, you might not even know which forms you need for your annual income tax filing. Luckily, the folks at the IRS are available to answer any questions you might have. There is a wealth of information available through their website, but you can also visit the nearest IRS office to talk to an agent, call their help line, or send queries by email. Best of all, these resources are available for free, and getting information from the source means you’ll get it right the first time.

Gather applicable paperwork and make copies. The problem most people make in the beginning is failing to collect and save appropriate documentation. Say you make a donation to charity and you want to write it off. If you don’t have the paperwork to back up your claim, the IRS may think you’re lying (and rightly so). You could still claim the deduction, but it’s bound to land you in hot water. So whether you have a shoebox full or receipts that you have to go through come tax time or you get more organized with a mobile app like Expensify that saves your receipts digitally, it’s of paramount importance that you have all of your documents in order. And don’t forget to save a copy for yourself in case the IRS comes knocking and you need to provide proof of purchase, so to speak.

Don’t forego deductions and credits. As a first-time filer you may not know that you could be eligible for all manner of deductions and credits. You can deduct for charitable donations and work expenses that weren’t reimbursed, as well as mortgage interest if you happen to own a home. And you can get credits for college expenses if you’re still in school. You simply have to think about what you spend money on and then see if there are ways to use your expenses to get money back from your income tax filing.

Talk to someone more experienced. Most people filing taxes for the first time are young adults. If you fall into this category, there’s no reason to go it alone, even if you don’t have the money to pay a professional tax prep specialist. Simply talk to your parents, extended family members, or friends who have filed in the past. These people aren’t experts, but if they’ve filed taxes before they can certainly give you advice, double check your work, and even help you file online or by mail.

Hire professional help. At some point you may have to concede that tax planning is just too complicated to maneuver on your own. Luckily, there are affordable options out there for people filing for the first time. And the upside of paying a tax prep specialist at H&R Block or an independent accountant like Yudichak CPA PC is that you’re likely to get money back, especially if you don’t earn a lot to begin with. And many such professionals guarantee their work, so if there is an error and the IRS charges you for it, you won’t have to pay a dime.

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Storewars News March 14, 2014 at 1:29 am

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