POPSUGAR Smart Living

5 Tips For Taxpayer Newbies

Mar 10 2014 - 12:42pm

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 [1] tax expert Richard Gartland, which will put any taxpayer newbie at ease.

Source: Shutterstock [2]

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:

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.

Claim Deductions

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:

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.

File Online

Filing taxes online can make it easier for DIY [3] 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”).


Source URL
http://www.savvysugar.com/Tax-Help-Beginners-14923126