First time filing taxes: Here’s what to expect

January 12, 2021 : H&R Block

Each year, millions of people will file their taxes. For many of them it will be their first time filing taxes. Some find the process a breeze while others find it intimidating. Don’t sweat it. H&R Block is here to help ease your worry with a few tax tips for filing taxes for the first time and help you get the best possible outcome.

First time doing taxes: 8 considerations

#1 When you MUST file taxes

Did you know that you aren’t required to file taxes if your income is below a certain limit?  The minimum income to file taxes will change based on a combination of circumstances, including filing status, income, and age. Taxpayers who aren’t sure if they have to file a return can answer an online IRS quiz, but must know their filing status, federal income tax withheld, and gross income.

Generally, taxpayers must file if their gross income exceeds the minimum. However, if a taxpayer is a dependent of another taxpayer, the dependent will have a lower filing requirement that could kick in as low as $1,100 in unearned income or $12,400 for earned income for tax year 2020.

#2 When a taxpayer SHOULD file

Anyone earning income should consider filing a return, even if the IRS does not require them to file. Workers who are not required to file a tax return because their income is below their filing threshold should file a return to get a refund of all taxes withheld and/or to claim other tax benefits, such as the earned income tax credit. Millions of workers miss this credit because they are not required, and decline, to file.

If you haven’t filed in the past because you weren’t required, getting a refund on withheld taxes may be incentive to make you want to file a tax return for the first time!

#3 When to file

The deadline for filing federal individual tax returns is typically April 15. If that date falls on the weekend or holiday, tax day is usually moved to the next business date.

That same date is also the deadline to request an automatic six-month extension to file, which gives taxpayers until October 15 to submit a return without a late-filing penalty. The same weekend and holiday rules apply to the extension deadline.

Take note: This is important especially if it’s your first time doing taxes. If you do need more time to file, that’s fine. Just know that the extension doesn’t give you additional time to pay the IRS if you owe taxes. You’ll still need pay your tax bill by the April deadline. Read on to get a few more details about paying your taxes.

#4 When to pay

To avoid late payment penalties and interest, taxpayers must pay at least 90 percent of any taxes owed by the April deadline. Even if they file for an extension, the extended October deadline only applies to filing the return, not the tax payment.

#5 How to file

Do-it-yourself software and online tax filing programs select the appropriate forms for you and use everyday language, making tax law easier to understand. However, the assistance from a qualified tax professional can help put taxpayers of all income levels at ease and does not require you to understand taxes. Ultimately, if you’re doing your taxes for the first time, you should consider your comfort level and personal preference to determine the best method.

When choosing a tax professional, taxpayers should look for someone with ongoing education and expertise, who can keep personal information secure, guarantees their work and is available year-round. When looking for a DIY option, taxpayers should choose a reputable program that uses multiple layers of protection for data security and guarantees its results.

#6 How to fix a mistake

If a taxpayer discovers a mistake on their return after filing, they can file an amended tax return at any time. To get a refund, the original or amended return must generally be filed three years from the original due date of the return.

#7 Lessons from the first time filing taxes

If it’s your first time filing taxes and you discover you had too much or too little tax withheld during the year, you can adjust how much tax is withheld for future paychecks. Some people like to have a refund when they file, while others would rather have more income throughout the year. 

Our W-4 paycheck tax calculator can help you decide how to fill out or adjust your W-4.

#8 You might be able to file for free

Depending on your situation, you may qualify to file your taxes for free. Learn about H&R Block Online Free.

Taxes can be intimidating, but first-time filers who at least know what to expect will be better prepared for tax season – and may even learn to love it.

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