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Raise your hand if you have no idea how to file taxes, and you are not 100% sure on how taxes work! However, you understand that if you don’t pay them, your life will get worse. Yeah, me too! As a soon to be college graduate on her way to working a full-time job, this information is critical. It’s confusing and scary when you first look at it, but when broken down into simpler terms, it gets better. The Internal Revenue Service doesn’t have to be your enemy. All you need is more information about the money flow to and from your hands. The system is a bit complicated, so the best place to start is with the fundamentals.

Congress is at the head of it all. They write all the rules and regulations that the IRS has to enforce. The taxes that are automatically taken from paychecks are what the government relies on for revenue. At times, we pay them too much. That’s the reason why every year, everyone who works would file for a tax return, meaning that extra money you sent to the government would be given back to you. 

 

W-2 is a tax document that most of us will start with filing. While filing, you may be able to make your tax bill smaller by getting a tax deduction. The document gives us the option to either do a standard deduction or to itemize the deduction. What this means is if you choose the standard option, the deductions will be automatically taken off. If you choose to itemize your deduction, you are going to have to claim every single deduction of your choosing, which is more time-consuming. Despite this, the long route may be better at times depending on your situation. It’s advised to choose the standard deduction if your tax year isn’t above $12,400 ($28,400 if married).

As for the “filing your taxes” part, there is another decision you have to make because you can do it yourself or hire a tax expert. If you happen to own a business, get married, want to itemize your deductions, or have multiple sources of income, then a tax professional is highly recommended. You don’t want to make mistakes, especially if this will be the first time. The usual deadline for all this to be done is April 15. However, due to the pandemic, this has been extended to July 15th. 

 

If reading this makes you feel like you are getting old, then I am with you. When you start filing for your taxes is a milestone that every adult has to go through. It’s scary and nerve-wracking, but this is part of the sublime process of growing up. 

For more detailed information, here is my source. Below is a link to an IRS website that teaches you about taxes in-depth. It even includes examples and quizzes!

How to File Your Taxes in 5 Simple Steps | DaveRamsey.com

Understanding Taxes (irs.gov)

• money management
• taxes