When it comes to filing your taxes, it can be a scary thing. Especially the first time you are filing. Most times the fear is because of the unknown and the difficulty surrounding taxes and the tax code. I am here to tell you that filing your own taxes isn’t that difficult. In fact, it is fairly straight forward and easy, especially in your 20′s. Once you begin working full-time, have investments, a house, kids, etc. that is when taxes can quickly become a nightmare. But for now, filing your own taxes is a possibility.
Question Before We Start
Before we start to talk about filing your own taxes, you need to know one thing first: are your parents going to claim you as a dependent on their tax return? Many times college students will still be claimed on their parent’s tax returns so that the parent can get the deduction for having a dependent. If your parents are claiming you as a dependent, then you cannot file your own taxes. Bookmark this post for when you are no longer a dependent and file your own taxes.
Filing Your Own Taxes
Assuming now you are not being claimed as a dependent on your parents tax return, you will need to file your own taxes. As I said before, your tax situation is most likely fairly straight forward. You might have some income from a summer job and you can claim some higher education credits and deductions.
You can easily use a program like TurboTax to assist you in filing your taxes. I used this program for over 5 years to file my taxes. They walk you through everything, step-by-step so that you don’t miss anything. Additionally, they do a free audit check for you as well. I never had any issue when filing my taxes using TurboTax.
Going With A Pro
In some cases, you may be just too scared to file your own taxes. This is OK. In this case, you can hire a CPA to do your taxes for you. Just schedule an appointment and bring your W-2′s and 1099′s with you and they will complete your taxes for you. They will charge you, but you shouldn’t pay a steep fee for their service. With all of the CPA’s I’ve dealt with, their fee is based on the complexity of the return. Your return will most likely be very basic and therefore, should not incur a high fee. I would be surprised if it was over $100.
If you do decide to go with a professional, please look over your return once they have completed it. You are not looking for mistakes, but rather to see how easy it is to complete your taxes yourself. You will be able to follow along and see where what numbers go where. This should take away a lot of the fear of the unknown for you and give you the confidence to complete your taxes yourself next year.
The most common question or concern I get from people when I tell them their own taxes is how to know they are taking all of the deductions and credits they are entitled to. My answer is that by using TurboTax, I am confident it finds all of the deductions and credits I qualify for.
When I used TurboTax, it walked me through everything, step-by-step. It would ask me questions like, did I attend college last year. If I answered ëyes’, then it would prompt me to see if I qualify for credits and deductions for higher education. If you answer the questions honestly, you should not have an issue missing credits or deductions. In fact, if you have any questions, they have an excellent knowledge base as well.
Learning to do your own taxes isn’t as scary or complicated as many make them out to be, especially when you are in your 20′s. By taking the time to do your own taxes, you get a better sense of how your money works and how taxes work. This will help you to make smarter decisions in the years ahead so that you limit your tax liability and keep more of your hard earned money.