5 Tips For Taxpayer Newbies
If this is the first time you're raking in the dough, all our tax tips might sound like gibberish to you. Although you hear people moaning and groaning about the yearly tax season, don't let it overwhelm you. Here is a list of tips from H&R Block tax expert Richard Gartland, which will put any taxpayer newbie at ease.Source: Shutterstock
Gather Your Tax Forms
The first step to filing your taxes is to make sure you have the correct documents. Depending on your particular situation, you will receive several types of tax forms, including:
- salary and wages (W-2)
- bank interest (1099-INT)
- dividend income (1099-DIV)
- mortgage interest (1098)
- tuition payments (1098-T)
- student loan interest payments (1098-E)
- receipts or other records that support any itemized deductions.
Report All Income
Between internships, part-time jobs and salaried positions, as a first-time filer, you probably have several sources of income. Make sure to report all of your income for the year. If you were enrolled in college during the year and received financial assistance, check the rules on what types of financial assistance are taxable. In some cases, grant, fellowship or scholarship income may be taxable, generally if used to pay expenses other than tuition or if you were required to work in order to receive the scholarship. However, student loan proceeds will not be reported as income on your tax return.
To offset the income you report on your tax return, you should claim either the standard deduction or
itemize deductions individually (property, charitable contributions, some medical costs, mortgage interest,
etc.) Many first-time filers will not itemize because they will not have enough itemized expenses, like
owning a home, to exceed the amount of the standard deduction. Generally, first-time filers will opt for the
standard deduction, which is based on your filing status.
For 2013, the amounts are:
- $6,100 if you're filing as single or married filing separately
- $12,200 if married filing jointly or qualifying widow(er)
- $8,950 if you qualify to file as head of household
The standard deduction can be as low as $1,000 for taxpayers who can be claimed as dependents. A higher standard deduction applies to taxpayers who are 65 or older and/or blind.
Filing taxes online can make it easier for DIY filers to receive their tax refund or pay owed taxes. If you are owed a refund, consider selecting Direct Deposit to ensure faster receipt. If you owe additional taxes to the IRS, make sure that you send your balance due payment by April 15, 2014 (filing deadline for tax year 2013) to avoid interest and penalties.
Select the Correct Filing Status
Your marital status on the last day of the year determines your filing status. If you were not married on December 31, 2013, you will file your 2013 returns as “Single” (unless you meet the requirements to file as “Head of Household”).