If you just finished your first year of self-employment or you sold your first asset, congratulations! Even if you’re not celebrating, though, it’s still time to start thinking about how to do taxes for the first time. Whether you’re filing as an individual or as a small business owner, here are some tips to make tax season less overwhelming and more productive.
Why Should I File My Own Taxes?
There are a few reasons why you might want to file your own taxes, even if you don’t have any tax experience. Maybe you’re on a tight budget and can’t afford to hire a professional. Or maybe you just like the idea of being in control of your own finances. Whatever your reasons, filing your own taxes is definitely doable.
Tax Filing Options – Which Is Best For Me?
There are a few different ways to file your taxes, and it can be confusing to figure out which is best for you. If you’re a first-time filer, here’s a quick rundown of your options 1) You can do your own taxes using software like TurboTax or H&R Block At Home; 2) You can prepare your own taxes with tax software but hire someone else to e-file them; 3) You can use a tax preparer such as an accountant or certified public accountant who will both prepare and e-file them for you; 4) You could have another person, such as a parent or spouse, do the work.
The first step to successfully completing your taxes is getting organized. Gather up all of the relevant documents, including your W-2, 1099 forms, and receipts. If you don’t have everything you need, contact your employer or the IRS for help. Once you have all the information you need, take a deep breath and dive in!
Now that you’ve gathered your paperwork together, it’s time to file electronically if possible. Filing electronically will save both time and money as well as making it easier to complete your taxes on time.
Collecting Necessary Documents
One of the most important—and daunting—steps of doing your taxes for the first time is collecting all of the necessary documents. This can include everything from W-2 forms and 1099s to receipts and cancelled checks. The best way to stay organized is to create a folder or binder specifically for tax documents as you receive them throughout the year. That way, come tax time, you won’t be scrambling to track everything down.
Take the Standard Deduction
If you’re like most people, you’ll want to take the standard deduction when you file your taxes. The standard deduction is a set amount that you can deduct from your income, and it’s based on your filing status. For the 2018 tax year, the standard deduction is $12,000 for single filers and $24,000 for married couples filing jointly.
Compile your Schedule C, Form 1040, Form 1040A, and other forms based on your tax situation.
As a first-time filer, you may be feeling overwhelmed by all the different tax forms out there. But don’t worry, we’re here to help. The most important thing is to make sure you choose the right forms based on your tax situation. Below are some examples of what each form can do:
- Schedule C – use this form if you have self-employment income or other types of business income, including rental income and farm income; 2. Form 1040 – if you had wages or salary as an employee, interest and dividends from investments, or pension or retirement distributions;
Know When to Seek Professional Help
Taxes can be complicated, and if you’re doing them for the first time, it’s easy to feel overwhelmed. The good news is that you don’t have to go it alone. Here are four times when it makes sense to seek professional help with your taxes 1) You’ve had a life-changing event like marriage or divorce 2) You’re self-employed 3) You own a small business 4) You live in one of these states: Florida, Maryland, Minnesota, Ohio or Wisconsin
You should also contact a tax expert if you find yourself being audited more than once per year.