Paying your taxes is a serious business. However, when tax season rolls around, this is not often the first thing on a student’s mind. Most students either don’t need to file a tax claim or have someone else do it for them. While this saves the headache of dealing with lots of paperwork, it is still good to learn how to file your taxes.
The first thing you must know in order to file your taxes is the earnings requirements. If you are a teen classified as a dependent you don’t need to file unless you’ve earned over $5,700 in the fiscal year. You are also exempt if you are a single independent and make under $9,350 a year. Any self-employed person needs to file if they make over $400 a year.
- Ways to file your taxes
- Forms you must file
- Deductible items
- When to file your taxes
Ways To File Your Taxes
If you are required to file your taxes you should begin gathering your paperwork. That way you’ll be ready in January when your employer(s) sends the necessary forms. The first form you will need is a W-2, and you will receive one from each employer you have worked for during the fiscal year. It states the wages you have been paid over the year and the taxes that were taken out. Your employer(s) is required to mail this by the end of January, to be received some time in February.
There are several ways you can go about filing your taxes. First, you can choose to file the return yourself by filling out your 1040EZ form, but be aware this does not allow you to itemize deductions. If you do choose this option you should file online; it saves time and the IRS will send you a confirmation receipt.
You can also buy tax return software, which will guide you through the process step by step, or simply have an accountant handle your tax return. These are the safe, but more expensive ways to file.
Forms You Must File
Another form you will need depends on whether you have a savings account, or have earned interest or income from a source other than your employer. If so, you will need a 1099 form. With a student loan you can claim a deduction because of the interest (if you have begun paying it off already). In this case you will need a 1098-E form. You can claim the student loan deduction without itemizing your taxes.
A deduction is an eligible expense that individual taxpayers can report on their federal income tax returns in order to decrease their taxable income. Deductions refer to “tax-privileged items.” There are two types of tax deductions, standard and itemized.
A standard tax deduction is a dollar amount that tax payers may subtract from their income, based on their filing status. The standard deduction rate for a single tax-payer in 2011 is $5,800.
If you would like to itemize your tax deduction, you must first compute your adjusted gross income (AGI). Then, you will need to tally up your deductions in a Schedule A form, item by item. You can choose from a list of allowable items (i.e. gas, job related expenses you weren’t reimbursed for, charitable contributions) and subtract those specific deductions from your AGI. If your itemized deduction is lower than the standard, disregard it.
When to File
Now that you have gathered all the forms you should begin filing your taxes. It’s important to file early because the refund process slows down later in the season. If you miss the deadline, you should file for an extension by April 11. It comes with a fee, but it is preferable to the fines and trouble that comes with failing to file at all.
Before you send out your tax return make sure you have received all the necessary paperwork. If you forget a form and have already filed, it will cost money to amend your file. Be sure to make a list of the places you have worked and the banks/investment firms where you have accounts. This way you will know if you’ve received all the necessary paperwork.
- In January you should receive your W-2 form from your employer(s) and 1090 form from services that pay you interest.
- You can use the standard deduction or itemized deduction to subtract from your income.
- File early, before April 1 the latest.
- You can file your taxes either by yourself, with a software or through an accountant.