How to File Your Taxes
So your W-2 just came in the mail. Freaking out a little bit? Same. But it’s okay, filing your taxes doesn’t have to (completely) suck — just follow these simple steps and start planning how you’re going to spend that refund.
Step 1: Gather Your Tax Documents
Here is a checklist of all of the paperwork you will need to file your taxes:
- Your W-2s
- Student loan information
- Form 1095 to prove you had insurance
- Other sources of income
- Any other deductions you accumulated throughout the year
That may seem like a lot, but the first four are the only things you absolutely need, and they should arrive around the same time each year. You should get your W-2s from your employer by January 31st. If you haven’t received yours by this date, you should immediately speak to your employer.
Why student loan information? Well, little did I know that you can actually deduct the pesky interest you’re charged. Up to $2,500 can be used as a deduction each year, although this number is subject to change every year. That means more money in your pocket — cha-ching.
One of the hardest parts of filing your taxes is including all of your “taxable income.” Your salary covers the bulk of your taxable income, but you also have to report any bonuses, cash from odd jobs, court awards, hobby income, jury duty pay, and interest or dividends you received through a portfolio.
My mom always taught me the best way to keep track of your important documents is in a manila envelope, that way when you’re ready to file, you can grab your folder and go.
Step 2: Determine If You Need to File Taxes
Once you’ve gathered all of your documents, you can accurately decide if you need to file your taxes this year. Every year, the IRS releases the income level that determines who needs to file taxes.
For 2017, the income limits are $15,010 for a single individual with no children, but the amount increases if you have kids. For example, one child increases this amount to $39,617. If you’re filing married, the amount is $20,600. So, if your taxable income falls under these amounts, you don’t have to file your taxes. However, it may still be beneficial to continue through the process because you could receive a tax refund — which is what happens when you’ve paid too much money into the system.
Step 3: Choose Your Method of Filing
There are two main ways you can file your taxes: online or in-person. Naturally, there are pros and cons of both. The obvious pro of filing your taxes online is that you can curl up on the couch in your PJs with a glass of your favorite wine. Filing online is more convenient, and allows you to take your time — but without guidance from a professional, you may miss important information or deductions. Another huge advantage to filing online is that it’s much cheaper. Sometimes it’s even free, which is the case for H&R Block and TurboTax.
Filing your taxes in-person is rarely free since you’re consulting a tax expert who needs to be paid for their time. According to CBS News, filing in-person could cost as much as $147 per person. That’s a lot of money that could be used for a Sephora shopping spree (or invested if you’re looking to spend your tax refund a little more wisely). But keep in mind that you’re paying them for a reason — tax experts are trained and skilled at finding every deductible and credit possible, which could end up saving you a lot more than $147. Plus, it significantly decreases the chances of being audited.
Personally, I opt for the online option, but I’ve also filed my taxes a few times. I paid when I first started, asked a lot of questions, and then filed online the following years. I mean, it is free.
Step 4: File Your Taxes
Filing your taxes online is incredibly simple. Most websites are designed to guide even the biggest technophobes through the process with ease. All you need to do is fill in the correct boxes each time the site prompts you. For example, the website may ask for the amount in box four. You’ll look at your W-2 information, find box four, and input that number. These sites are also designed to probe for other possible credits by asking about student loans, donations, and other things people most commonly do throughout the year that may decrease the amount of taxes you owe.
However, filing in person is even easier than online. The hardest part is snagging an appointment that is available for both you and the tax professional. Most offices are open on the weekends, but these times fill up fast. It’s always best to call the business you’ve chosen and schedule an appointment as soon as possible. Arrive early and expect to stay later than planned. It could take much longer than expected, but that’s good! It just means the tax expert is doing their best to save you money. Once you sit down in front of your tax professional, just sit back, relax, and let them work their magic.
Step 5: Treat Yo Self
Alright, so this final step is entirely optional, but what you just accomplished is worth celebrating — filing your own taxes is a huge step for any newbie adult. Reward yourself with a glass (or bottle) of wine, Netflix binge your favorite show, or go out and conquer the world! You just handled tax season like a boss.
Last modified on January 11th, 2018