Students and others filing taxes for the first time might be confused about where to start. The first thing you need to check is whether your parents can still claim you on their taxes. You cannot file your own taxes if your parents are going to claim you. You should discuss whether you should file yourself or let your parents file for you with a tax attorney or a business tax attorney at France Law to determine which way provides the best benefits.
Do I Have to File Taxes?
If you earned money in the previous year and your parents can no longer claim you on their taxes, you must file taxes. Filing taxes is not that difficult if you don’t make a lot of money because you work part-time and do not have investments, property, own a business, or have other items you have to claim. Once you start building your wealth and becoming financially successful, taxes become more difficult.
However, we do recommend that you have a professional help you if it is your first time filing, even if you only have part-time income to claim. There are some rules about how much you have to make to file taxes.
Taking Control of Your Money
When you manage your money by taking control of it early, you are well on your way to becoming a financial success. Part of that is learning about managing your money, including managing your taxes. When you are still building up your assets, it’s easier, but once you get assets, including a business, it becomes more difficult. In a nutshell, if you paid more taxes than what the government says you owe, you’ll get a refund. If not, you’ll break even or have to pay.
Part of the paperwork you filled out to start working is a W-4 form. This form tells the IRS how many exemptions you are claiming. If you claim zero, you will most likely get a refund, but you’ll have less money in your check. If you claimed one or more, you’d have more money in your check, but you’ll be less likely to get a refund.
The IRS Is Not a Bank
Many people love getting a big refund back every year, so they’ll claim zero exemptions. But, the IRS is not a bank. You don’t get interest on that money. It’s better to get the amount you will owe as close as possible. You’ll have paid your taxes over time and hopefully won’t owe anything – but you’ll also have that extra money in your paycheck. Instead of letting the IRS hold it for you, you can bank that money and earn interest on it. This is how you take control of your money – by keeping it close to you and not letting the IRS “borrow” it.
Get Ready for Tax Season
Even first-time filers could have deductions. If you started a business in college, or your parents left you rental properties and other business assets, you could have a complex tax scenario, even as a first-time filer.
Tax laws change every year, and a tax professional at France Law can make sure you maximize your refund or minimize the amount you owe. To get ready for tax season, you will have to collect several documents and make copies of them for yourself – you’ll have to give the originals to your tax attorney.
Documents you will need include:
- W-2 forms received from employers
- 1099-Misc forms received from the money you earned working as an independent contractor
- Various 1099 forms for interest and other monies earned
- Receipts for the money you spent during the year if that money is a qualified deduction
- Information about vehicles and other assets you use for business, including the value of these assets
- Any other documents required to complete your taxes
Your tax attorney will ask you for other documents if he or she determines you should be claiming additional income or deductions.
The easiest way to get these documents ready is to have them scanned and filed appropriately so you know where everything is located. More importantly, so you don’t miss anything that will reduce your tax burden.
Contact the Experts
Contact France Law’s tax attorneys for a consultation with a tax attorney and to learn more about filing taxes for the first time or even your hundredth time! We are here to help.