If you haven’t thought about it yet, it’s time to get your ish together for filing your federal taxes and state taxes (if you live or work anywhere that has a state income tax). While it’s not April 15th yet, get on this, as it will take a bit of time to get your documents together, fill out and file your IRS Form 1040.
If you are living away from home and providing over 50% of your living support, you will likely be filing your own tax return as a non-dependent (that means your parents don’t claim you as a dependent on their tax return). You will file your federal taxes for the state where you live and in addition you may have to file a state tax return if you are earning a wage in a state that has a state income tax.
Documents/information that you will need to start out:
- Verify first with your parents that they will NOT be claiming you as a dependent this tax season. I.e. I am a non-dependent.
- Gather your W-2s for each employer you worked for during this past year.
- Student loan financial materials if applicable.
- If you have made any charitable contributions, cash or non-cash donations – find the details, including the name and address of the organizations.
- If your employer provided an HSA-eligible health insurance plan and you made contributions to cover any medical expenses, you may have some IRS reporting documents like 1099-SA to include in your filing.
- IRA contributions (you can include contributions made before April 15th on your return). You may be young, but it’s never too soon to start thinking about retirement savings. You can reduce how much tax you pay depending on how much you contribute. To help you out, see our post: Retirement Savings Account Basics – 401(k), IRA, and Roth accounts
This doesn’t have to be as hard as it may seem. Once you have your docs together, you can likely enter all your info in a few hours. There are a bunch of tools to help in the process. Here are some of the online tools/software that we’ve had good results with for filing simple tax returns for free. Just make sure that whatever tool you use is IRS approved for E-Filing (most are).
E-Filing online tools:
Take A Hike:
Definitely another one of those must do adulting things, so get on it.
This week – gather up your tax reporting information listed above and pick your source for filing your taxes. The faster you get all the info loaded and filed, the faster you can get your refund. #cheerstothat
Couple more tidbits:
- If you have interest/dividend income from financial institutions you will receive tax reporting documents for that. Unfortunately most banks pay little to nothing on savings account balances, so you will really only have this if you have income from stocks or dividends.
- Tax filing tools may have an upfront cost for the tool depending on how complicated your situation is, so choose wisely. They will walk you through the steps in detail, so that really can be worth it, especially if you want to maximize your tax deductions and credits (and we all do). And you will have a place in your taxable deductions to enter the cost of the software #paylesstax.
- W-2 is the reporting document that shows wages an employee earned and taxes and deductions withheld.
- When you started working for an employer, you will have filled out a W-4 form based on your current financial and personal situation. This feeds into the federal withholding that takes place each pay period. The official IRS site says “Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. Consider completing a new Form W-4 each year when your personal or financial situation changes.” https://www.irs.gov/forms-pubs/about-form-w-4
- For more on HSA’s – Health Savings Account – These accounts let you use pre-tax earnings to pay for medical or health related expenses. https://turbotax.intuit.com/tax-tips/health-care/what-is-irs-form-1099-sa-distributions-from-an-hsa-archer-msa-or-medicare-advantage-msa/L2IwVaB9X