{"id":16966,"date":"2022-02-15T10:00:21","date_gmt":"2022-02-15T10:00:21","guid":{"rendered":"https:\/\/www.businessedge.org\/filing-your-first-tax-return-heres-what-to-know\/"},"modified":"2022-02-15T10:00:21","modified_gmt":"2022-02-15T10:00:21","slug":"filing-your-first-tax-return-heres-what-to-know","status":"publish","type":"post","link":"https:\/\/www.businessedge.org\/filing-your-first-tax-return-heres-what-to-know\/","title":{"rendered":"Filing Your First Tax Return? Here\u2019s What to Know"},"content":{"rendered":"

As Benjamin Franklin said, nothing in this world is certain except death and taxes. While the former is hopefully many, <\/span>many <\/span><\/i>years away for you yet, you can be sure that when it comes to taxes, Uncle Sam will come knocking each and every year to make sure you\u2019ve paid your fair share.<\/span><\/p>\n

Tax time can be confusing though, even for people who have been paying taxes for decades. Tax laws change nearly every year, and the methods for filing evolve with new technologies and rules. If you\u2019re just starting out in your career or are a student filing taxes on your own for the first time, it can be especially intimidating.\u00a0\u00a0<\/span><\/p>\n

If you live in the U.S., your federal income tax return will be due sometime in mid-April, and your state income tax will be due around the same time (depending on your state). Read on for some high-level information and resources to help you prepare for tax season.<\/span><\/p>\n

What is a tax return?<\/span><\/h2>\n

Your tax return is a calculation of what you owe the Internal Revenue Service (IRS) or what they owe you. A tax return reports income and earnings to the IRS, and filing one allows you to claim various deductions to reduce your taxable income to the lowest amount possible.<\/span><\/p>\n

When you have a job, your employer withholds some money from your paycheck for federal income taxes, social security taxes, and state and local income taxes (in most states). As painful as it can be to hand over a chunk of your hard-earned money, remember that your taxes are helping to pay for important things in your community, like roads, law enforcement, and schools.<\/span><\/p>\n

When you start a new job, your employer will ask you to provide information on Form W-4, the Employee\u2019s Withholding Certificate. This helps them determine how much money to withhold from your wages.<\/span><\/p>\n

By January 31st, your current employer and any former employers from the past year will give you a Form W-2 \u2014 the Wage and Tax Statement \u2014 showing how much you earned in wages, tips, and other compensation. It will also show the state and federal taxes, social security, Medicare wages, and any tips withheld. You will need this form when you file your tax return.<\/span><\/p>\n

If you\u2019re self-employed as a business owner or freelance worker, you\u2019re required to make estimated quarterly tax payments throughout the year as you bring in earnings, since you don\u2019t have an employer to withhold those for you.<\/span><\/p>\n

Who has to file a tax return?<\/span><\/h2>\n

Whether or not you need to file a tax return depends on your gross income and whether your parents can claim you as a dependent. (If you\u2019re a student, keep in mind that scholarships and grants are typically tax-free, but there may be situations in which you must include them in taxable income.)<\/span><\/p>\n

Each year, the IRS publishes a table like the one below, with the filing requirements for people who aren\u2019t claimed as a dependent on someone else\u2019s return. For example, if you\u2019re under 65 and your gross income was at least $12,550 in 2021, you would need to file a return for that year. Gross income is anything you receive in the form of payment that’s not tax-exempt (i.e., money, services, property, or goods).\u00a0<\/span><\/p>\n

If your income is greater than the levels listed in the table, you must file a tax return. However, income isn\u2019t the only factor involved. Other things can affect your filing status, too, including:<\/span><\/p>\n