Once you get your first job and you’re making your own money, you will receive a W-2 shortly after the new year begins. Suddenly, you are thrust into the world of taxes and might not know what you’re supposed to do. If you find yourself in this situation, read on, and we’ll lay it all out for you.
First things first: Do you need to file taxes?
First of all, you might not need to do anything. If you’re single and earn below $14,600 in 2024, you might not even need to file a return. If you are married filing jointly, the filing threshold is $29,200.
But just because you don’t have to file a tax return doesn’t mean you shouldn’t file. If federal taxes were withheld from your paycheck, you may be due a refund of federal income taxes. The same concept applies if you are a resident of a state with income taxes and had state income taxes withheld from your pay. In addition, you may be eligible for the Earned Income Tax Credit (EITC), which provides refunds to low-to-moderate-income taxpayers who meet certain requirements.
There are a few other situations that would require you to file a tax return, such as being self-employed. Taxpayers are required to file a tax return if they earn over $400 a year in self-employment earnings. To find out whether you should file a return, you can use the IRS tax filing tool.
How to do your taxes for the first time: Step-by-Step
First-time tax filing may seem daunting at first, but we will simplify this process. Let’s walk through the steps you should take when filing your taxes for the first time.
Step 1: Gather documentation
To file your tax return, you need to gather certain information. Some of it is easy – your name, address, and Social Security number. You will need all the forms that have been given to you by your employers and any institutions that paid you interest or dividends.
Typical tax documents received are called W-2s and 1099 forms. If you have other types of income, such as from real estate or trusts, gather up the documentation you have for how much you received during the year. This documentation could include year-end statements or bank statements for earnings.
As you prepare to file your taxes, take a look at our tax document checklist to make sure you don’t miss anything.
Step 2: Determine whether you have dependents
A dependent relies on your financial support. To qualify as your dependent, they must:
- Be a U.S. citizen, resident alien, or Canadian/Mexican national resident.
- Not be claimed as a dependent on another return..
- Not claim a dependent on their own return.
- Not file jointly with their spouse.
- Meet criteria as either a qualifying child or a qualifying relative.
For qualifying children, dependents must:
- Be related to you.
- Be under 19 (or under 24 if a full-time student) or any age if disabled.
- Reside with you for over half the year, with exceptions.
- Receive over half of their financial support from you.
- Not file a joint return unless solely for refund claims.
For qualifying relative, dependents must:
- Reside with you all year or meet specific relationship criteria.
- Have a gross income under $5,050 in 2024 and receive over half of their financial support from you.
- Do not have to be related to you.
Step 3: Identify which credits and deductions you might be eligible for
In today’s gig economy, lots of first-time filers may find that they are self-employed. This means they are paid with a 1099-NEC instead of a W-2 form. If you have income from self-employment, you’ll also need to make a list of all the business deductions that you have to ensure you minimize your tax liability.
For example, if you drove for a ride-share company, you can claim auto mileage expenses, and if you wore a uniform, you can deduct the cost of buying and cleaning your uniforms if the uniform cannot be worn outside of work.
Now, let’s get a grasp on credits and deductions. Simply put, credits cut tax owed dollar for dollar, and deductions reduce taxable income.
Common examples of credits include those related to:
- Childcare
- Homeownership
- Retirement savings contributions
- Investments in clean energy
- Education
Common examples of deductions include:
- Business expenses
- Health savings account contributions
- Student loan interest
- Work-related education expenses (for some groups)
- Military moving expenses
The good news is that there are tools like QuickBooks Self-Employed that helps you track your business income, expenses, and mileage year-round in the future. You can then easily export your information to your TurboTax Premium tax return.
Step 4: Decide whether you’re going to claim the standard or itemized deduction
There are two kinds of deductions that you will ultimately file for. You will either take the standard or the itemized deduction. The deduction you take will be the one most beneficial to you. For example, you would only itemize deductions if the eligible expenses you’re planning to write off l exceed the standard deduction.
2023 standard deduction amounts are:
- $13,850 for single/married filing separately
- $27,700 for married filing jointly/qualifying surviving spouse
- $20,800 for head of household.
2024 standard deduction amounts are:
- $14,600 for single/married filing separately
- $29,200 for married filing jointly/qualifying surviving spouse
- $21,900 for head of household
Step 5: File your taxes
As you plan to file your taxes, you may want to check which tax brackets you fall into and use that information to estimate how much you’ll owe.
The filing deadline for individual federal income taxes is April 15. While most people file online nowadays, you can also file by mail. Keep in mind that mailing your tax return does delay processing and refunds will typically take weeks longer than if you e-file your return..
Filing online
Once you’ve gathered everything together, it’s time to file. At Turbotax, as with the IRS, if you meet certain criteria, you can file for free. If your only income is from a W-2, filing is a snap – literally. With the Turbotax mobile app, all you do is snap a photo of your W-2, and Turbotax takes it from there. What could be simpler?
Mailing in your return
For those mailing tax returns to the IRS: Each state has unique mailing addresses so be sure to mail your return to the correct address for your state.
Step 6: Pay your taxes
If you have done everything and gotten this far, great job. You will either be receiving a refund or have to taxes to pay. If you owe, there are a few different ways one can go about paying your taxes, including:
- Direct pay from a bank account
- Credit/debit cards
- Electronic fund withdrawal
- Electronic federal tax payment
- Check/money order
- Cash
First-time filing frequently asked questions
Can I get an extension?
Yes, and fortunately, it’s incredibly easy to file for an extension with TurboTax. The IRS typically grants a six-month extension, giving you until October 15, 2025, to file your taxes for 2024. It’s important to note that this isn’t an extension to pay your taxes, though.
What if I can’t afford my taxes?
If you can’t afford what you owe, payment plans are available. You can arrange short or long-term payment plans with the IRS. Keep in mind that any unpaid taxes will incur penalties and interest, even if you have a payment plan. However, generally, as long as you’re compliant and trying to pay your unpaid taxes, the IRS will usually work with you to get your taxes paid.
