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A first-time filer's guide to taxes

Published April 3, 2014 8:21 pm

This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Filing a tax return on time and meeting all the requirements can be daunting, particularly your first year at it.

Whether or not you are required to file depends on a number of factors, including your filing status, age, type and amount of income you received and how much your employer(s) may have withheld in federal and/or state taxes over the year.

If you have never filed taxes before, be sure to check with your parents about whether anyone can claim you as a dependent this year, that will affect your return.

This is not a curve ball, but let's say you don't have to file. You may want to do so anyway, to be sure you don't miss out on refunds or credits. Why leave money on the table?

Now, let's pull it all together.

Do I have to file a return?

You could get a refund even if you did not owe any tax.If you are a U.S. citizen or resident or a resident of Puerto Rico, your filing requirements will depend on your gross income, filing status and age. This table or this questionnaire will help you determine if you owe tax.

There are incentives for filing even if you're not required to:

Earned Income Tax Credit (EITC) • You may qualify for the EITC if you worked, but didn't earn a lot of money. It reduces the amount owed, so you could get a refund.

Saver's Credit • This credit helps offset the first $2,000 that low- and moderate-income workers contribute toward retirement.

American Opportunity Credit • This education-related credit has been extended through 2017. The maximum credit per student is $2,500 if the first four years of postsecondary education was not completed before 2013.

Health Coverage Tax Credit • This credit is worth a portion of your monthly health insurance premiums. To qualify, you must be receiving Trade Adjustment Assistance, Alternative Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation.

Child and Dependent Care Credit • You might be able to claim this credit if you have records you paid a child care provider while you were at work or looking for a job.

Now that you're filing, get organized. There are some basic records that will prove how much you earned and how much spent.

Income

Wages/Salary • Form W-2; and for the self-employed Form 1099-MISC, invoices, receipts, sales tax records and accounting records

Unemployment compensation • Form 1099-G

Estates and/or trusts • Schedule K-1

Interest • Form 1099-INT, 1099-OID, bank statements, brokerage statements

Capital gains and losses • Form 1099-B or Substitute 1099, you must be able to show your costs for acquiring any stocks and proceeds from any sales.

Dividends • Form 1099-DIV or Substitute 1099

Miscellaneous income • Form 1099-MISC

Expenses

Self employment • Accounting records, receipts, canceled checks

Medical and dental • Receipts, canceled checks, invoices, pay stubs

Interest • Bank statements, Form 1098 (mortgage)

Taxes • Form W-2, receipts, canceled checks

Charitable contributions • Receipts, canceled checks

Having this documentation at your fingertips will save you time while preparing the tax return, help prevent mistakes and avoid a possible IRS audit.

File on time

Tax returns are due to the IRS each year on April 15. If you can not make the deadline, you are allowed to file Form 4868 to seek an extension for six months. Otherwise, you could face monetary penalties and interest.

Should you want to try your hand at filing yourself, you can mail paper returns or file electronically using services such as the IRS e-file system. If your adjusted gross income (AGI) — basically income minus expenses — totals $57,000 or less, you are eligible for the Free File program. There are many software programs to guide you as well, such as TurboTax, TaxAct and H&R Block at Home.

Otherwise, professional services are available through accountants, lawyers or tax preparers.

Where to get help

The IRS has a 24-7, toll-free number for answering questions if you get stumped: 1-800-829-1040 and offers online resources at http://www.irs.gov. You can also find local IRS offices by using the number or website.

National Taxpayer Advocate Nina E. Olson offers tips for selecting a tax preparer.