ADAPERS PRESS by Adriana Morga
NEW YORK (AP) – The deadline to file taxes is less than a month, and if you’re doing them for the first time, you may be experiencing pressure.
“It’s a very difficult and stressful experience for many people,” said Mikros Ringbauer of California, based with accredited public accountants.
Ringbauer said planning ahead, research and talking to experts could help first-time filers feel better about taxes.
The deadline for filing taxes for 2024 is April 15th. If you run out of time, you can apply for an extension until October 15th. If you believe you will pay tax payments, you must pay the estimated amount before the deadline to avoid paying fines or interest. Even if you are expected to receive a refund, you will receive money when you submit your taxes.
If you are submitting taxes for the first time, here are some expert recommendations:
Collect your documents
The first step is to gather all relevant documents, said Eva Simpson, vice president of member values at the U.S. CPAS Institute.
“It’s important to track documents, especially if they’re in college and there’s a chance that communications could be sent to their parents’ home,” Simpson said.
Also, Ringbauer recommends creating a physical or electronic folder using all the documents you need. This makes it easier to file taxes.
The documentation you need may depend on the individual case, but here is a general list of what everyone needs.
Eligible deductions such as education, healthcare, charitable contributions, etc. if you employ Social Security Number W-2 Form, unemployed, for 1099 Form, for self-employed savings and investment records. Tax credits such as child tax credits and retirement savings contributions
Talk to your parents
Many young adults receive some financial support from their parents when they are ready to file their taxes for the first time. Simpson said it’s important to communicate with parents in case the first filer is claimed as a dependent.
“Being charged as an addiction affects the standard deduction and eligibility for certain credits,” Simpson said.
Conversing with your parents prevents you from claiming tax credits that you may not qualify if you claim you as a dependent. If your parents claim you as a dependent, you will add this information to your tax return.
I know about tax credits and deductions
Knowing whether you qualify for a tax credit and deduction is an important step when filing your taxes, Simpson said. Tax credits can reduce the amount of tax you owe or increase the amount of refunds. Some tax credits associated with first-time filers include the US Opportunity Tax Credit and Earned Income Credit.
Regarding deductions, you can choose to either standard deduction or itemize. Generally, it only makes sense if the itemized deduction exceeds the current standard deduction of $14,600 for a single filer and $29,200 for married couples.
“In many cases, first-time filers don’t need to itemize costs,” Simpson said.
Asking experts about the types of deductions and tax credits you are eligible for can save you money,
Include investments and gigs economic income
Tim McGrath, a certified Chicago-based financial planner, will need to add this income to his tax return if he works for freelance, ride-sharing, or sells clothes online in addition to part-time or full-time jobs.
Forgetting to add tax revenue from freelance jobs to tax documents is a common mistake by young filers, Ringbauer said.
Some gig workers receive 1099 forms from their employers, while others are not employers, both can document their income and expenses and add them to their tax returns.
Know the resources available
Simpson recommends that first-time filers consider multiple resources available to file taxes for free or low cost. One of them is the new Direct File program. This will allow people from 25 states who have a very simple W-2 to calculate returns directly to the IRS and send them for free.
Aside from direct files, the IRS offers free, guided tax preparations to do math for you. This is available to people who earn under $79,000 a year. If you have questions while working on a tax form, the IRS also offers interactive tax assistant tools that can provide informed answers.
AARP also offers a tax locator that lets you search for tax assistance near you.
Please double check to avoid any mistakes
Ringbauer said mistakes can happen to everyone, but deliberately ignoring income can have more consequences. Generally, if you make a mistake, the IRS will audit you because you are missing something on your tax return. That means they want you more documentation.
A common mistake is not to declare a source of income, such as gig work or selling products online, Ringbauer said. This should be taken very seriously, he said.
“One of the biggest challenges is not to take it seriously and not to care about the nuance,” Ringbauer said. “Because life is accurate.
If you need to correct an error in your tax return you have already filed, you can submit an revised return.
Keep your records
According to Ringbauer, keeping a record of your tax return in case the IRS audits items reported years ago is always a good practice. The IRS recommends keeping documents for at least three years, up to seven years, depending on the situation.
Ringbauer recommends that clients keep records of their tax documents in digital folders on their chosen cloud platform. Protecting your password tax folder can also add an additional layer of protection against scammers.
The Associated Press is supported by the Charles Schwab Foundation for education and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.
Original issue: March 27, 2025, 1:41pm EDT
