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Filing Taxes For The First Time? Here’s What You Need To Do
February 6, 2025
Filing taxes for the first time can be daunting, but with the right guidance, it doesn’t have to be overwhelming. At Peoples Savings Bank (PSB), we’re committed to helping you navigate the tax filing process with ease. Follow these steps to file your taxes for the first time, take advantage of common tax deductions, and use free resources to make the process smoother.
STEP 1: GATHER YOUR DOCUMENTS
Before you start filing your taxes, make sure you have all the necessary documents:
- W-2 forms: Provided by your employer, these forms show your income and taxes withheld. You should receive these by the end of January.
- 1099 forms: If you’re self-employed or have freelance income, you’ll receive these forms. There are different types of 1099 forms (e.g., 1099-MISC, 1099-NEC) depending on the nature of your income.
- Interest statements: From banks, credit unions, or other financial institutions. These include forms like 1099-INT for interest income.
- Medical expense receipts: For medical expenses exceeding 10% of your adjusted gross income. Keep detailed records of all medical expenses, including prescriptions, doctor visits, and medical procedures.
Step 2: Understand Common Tax Deductions
Take advantage of these common tax deductions to minimize your tax liability:
- Standard deduction: A fixed amount based on your filing status (single, married filing jointly, etc.). For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly.
- Charitable donations: Donations to qualified organizations. Make sure to keep receipts and documentation for all charitable contributions.
- Medical expenses: Expenses exceeding 10% of your adjusted gross income. This includes out-of-pocket expenses for medical care, prescriptions, and health insurance premiums.
- Student loan interest: Interest paid on student loans, up to $2,500 per year. You can claim this deduction even if you don’t itemize your deductions.
- Mortgage interest: Interest paid on a mortgage for your primary residence. You’ll receive a Form 1098 from your lender detailing the amount of interest paid.
For more information, check out 22 Popular Tax Deductions and Tax Breaks – NerdWallet
Step 3: Use Free Resources
Take advantage of these free resources to make tax filing easier:
- IRS Free File: A free tax preparation and filing service for those earning $84,000 or less. It offers guided tax preparation and electronic filing.
- TurboTax: A popular tax preparation software offering a free edition for simple returns. It provides step-by-step guidance and checks for errors.
- H&R Block: A tax preparation service offering free filing for simple returns. They also offer in-person assistance if you need help.
Step 4: File Your Taxes
Now that you have all the necessary documents and knowledge of common tax deductions, it’s time to file your taxes:
- E-file: The fastest and most convenient way to file your taxes. Most tax preparation software offers e-filing, and the IRS processes e-filed returns faster than paper returns.
- Mail: Mail your tax return to the IRS address listed on the instructions. Make sure to send it via certified mail to ensure it arrives safely.
- Tax professional: Consult with a tax professional to ensure accuracy and maximize deductions. They can provide personalized advice and help you navigate complex tax situations.
File with Ease
Filing taxes for the first time may seem intimidating, but with the right guidance, it can be a smooth process. Remember to gather all necessary documents, take advantage of common tax deductions, and utilize free resources to make the process easier. And if you need help getting your finances in order—contact your local financial experts at PSB! Open an account with PSB online today!
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered as personalized tax or financial advice. It’s essential to consult with a tax professional or financial advisor to ensure you’re taking advantage of all eligible deductions and credits.