Tax Tips for First-Time Filers: What to Expect

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Tax Tips for First-Time Filers: What to Expect

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Filing taxes for the first time can feel overwhelming, but with the right knowledge and preparation, the process can be much smoother. Whether you’re a student, a recent graduate, or someone who just landed their first job, understanding the basics of tax filing is essential. Here’s a guide to help you navigate tax season with confidence in 2025 while filing your 2024 taxes.

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1. Determine If You Need to File

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Not everyone is required to file a tax return. The IRS sets income thresholds based on filing status, age, and dependency status. Generally, if you earned more than the standard deduction ($14,600 for single filers in 2024), you must file a return. However, even if you’re not required to file, you may still want to—especially if you’re eligible for a refund.

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Additionally, you may be required to file a return if you had self-employment income exceeding $400, received unemployment benefits, or had taxes withheld from your paycheck and want a refund. Understanding your filing requirement is the first step in ensuring you comply with tax laws and take advantage of potential refunds or credits.

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2. Gather Your Documents

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Before you start filing, you’ll need to collect essential tax documents, such as:

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• W-2 Form: If you earned wages from an employer, they should provide this by January 31st, 2025.

• 1099 Forms: If you worked as an independent contractor or earned income from investments, you may receive a 1099.

• Bank Statements: These help track interest income or deductible expenses.

• Education Forms (1098-T): If you paid tuition or student loan interest, you might be eligible for education credits.

• Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN): This is required to file your return.

• Healthcare Forms (1095-A, B, or C): If you received healthcare through the marketplace, employer, or another source, you may need these forms to report your insurance coverage.

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✅ Having all your documents organized before filing will help ensure a smooth process and minimize the risk of errors that could delay your refund.

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3. Choose How to File

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There are several ways to file your taxes:

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• IRS Free File: If your income is below $79,000 for 2024, you may qualify for free tax software through the IRS.

• Professional Tax Preparers: If your taxes are more complex, hiring a tax professional can ensure accuracy and maximize deductions.

• Paper Filing: Though less common, some individuals prefer to file a paper return and mail it to the IRS. However, this method takes longer to process, and there’s a higher chance of errors.

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4. Understand Deductions and Credits

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Deductions and credits reduce your taxable income and the amount of tax you owe. Some key ones include:

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• Standard Deduction: Most first-time filers take the standard deduction, which reduces taxable income. For 2024, the standard deduction is $14,600 for single filers and $29,200 for married couples filing jointly.

• Education Credits: The American Opportunity Credit (AOTC) and Lifetime Learning Credit (LLC) can help offset education expenses.

• Earned Income Tax Credit (EITC): If you have low to moderate income, you might qualify for this valuable credit.

• Child Tax Credit (CTC): If you have dependents, you may be eligible for a tax credit of up to $2,000 per child.

• Student Loan Interest Deduction: If you paid interest on student loans, you may be able to deduct up to $2,500.

• Retirement Contributions: Contributions to traditional IRAs and 401(k)s may be tax-deductible.

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✅ Understanding these deductions and credits can help you lower your taxable income and potentially increase your refund.

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5. Be Aware of Tax Deadlines

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The tax filing deadline for 2024 taxes is April 15, 2025. Filing late can result in penalties if you owe taxes, so mark your calendar and file on time. If you need more time, you can request an extension until October 15, 2025, but you’ll still need to pay any taxes owed by the April deadline.

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For those who are self-employed, estimated tax payments for 2024 are due quarterly on April 15, June 17, September 16, and January 15, 2025. Keeping track of these deadlines is essential to avoid penalties and interest charges.

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6. File Electronically and Choose Direct Deposit

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E-filing is the fastest and most secure way to submit your tax return. Opting for direct deposit can get your refund quicker, often within 21 days. Paper filing can take six to eight weeks, so electronic filing is recommended whenever possible.

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Additionally, direct deposit allows you to split your refund into multiple bank accounts, which can be useful for savings or paying off debt.

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7. Watch Out for Common Mistakes

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First-time filers often make errors that can delay refunds or trigger IRS notices. Avoid mistakes like:

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• Incorrect Social Security Number: Double-check all personal details.

• Mathematical Errors: Tax software can help prevent miscalculations.

• Forgetting to Sign: If filing by paper, your return isn’t valid without a signature.

• Mismatched Information: Ensure your name, SSN, and reported income match what’s on your official documents.

• Not Reporting All Income: Even if you made side income from freelancing or gig work, you need to report it.

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8. Keep Copies of Your Tax Return

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Always save a copy of your return for future reference. You may need it for loan applications, future tax filings, or verification purposes.

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Additionally, keeping records of receipts, charitable donations, and medical expenses can help you substantiate deductions if you’re ever audited by the IRS.

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9. Plan for Next Year

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Once you’ve filed your first tax return, take steps to make the next tax season easier:

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• Adjust your W-4 Form if too much or too little tax was withheld from your paycheck.

• Keep track of deductible expenses throughout the year.

• Stay informed about tax law changes that may affect your filing status.

• Consider opening a Health Savings Account (HSA) if you have a high-deductible health plan, as contributions are tax-deductible.

• Set up a retirement account such as an IRA or 401(k) to take advantage of tax-deferred growth.

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10. Seek Help if Needed‍

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If you’re unsure about any aspect of filing your taxes, don’t hesitate to seek help. Resources include:

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• IRS.gov: The IRS website provides free tax tools and guidance.

• Volunteer Income Tax Assistance (VITA): A program offering free tax help for qualifying individuals.

• Tax Professionals: Enlisting a certified tax professional can ensure accuracy and optimize tax savings.

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Final Thoughts

Filing your taxes for the first time doesn’t have to be stressful. By understanding the process, gathering the right documents, and utilizing available resources, you can file with confidence and potentially maximize your refund. If you’re ever in doubt, consider seeking guidance from a tax professional to ensure accuracy and compliance. Happy filing!

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Frequently Asked Questions (FAQs)

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1. Do I need to file a tax return if I only worked part-time?

It depends on how much you earned. If your total income is below the standard deduction ($14,600 for single filers in 2024), you may not be required to file. However, if federal income tax was withheld from your paycheck, filing a return could get you a refund.

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2. Can I file my taxes for free?

Yes! If your income is below $79,000, you may qualify for IRS Free File, which provides free tax software through the IRS website. Some states also offer free filing options.

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3. What happens if I miss the tax deadline?

If you owe taxes and don’t file by April 15, 2025, you may face late penalties and interest. If you’re due a refund, there’s no penalty, but you’ll need to file within three years to claim it. You can request an extension until October 15, 2025, but any owed taxes must still be paid by the April deadline.

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4. Do I need to file taxes if I was paid in cash?

Yes. Any income you earn—whether through a regular paycheck, cash jobs, freelancing, or gig work—must be reported to the IRS. If you made $400 or more from self-employment, you must file a return and may need to pay self-employment taxes.

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5. Will I owe taxes if I’m a student?

Being a student doesn’t automatically exempt you from taxes. However, you may qualify for education-related tax credits like the American Opportunity Credit (AOTC) or the Lifetime Learning Credit (LLC) to help reduce your tax burden.

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I hope this information was helpful! If you have any questions, feel free to reach out to us here. I’d be happy to chat with you. 

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Vincere Tax can help you with the tax implications of business taxes, stocks, bonds, ETFs, cryptocurrency, rental property income, and other investments. 

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Being audited is comparable to being struck by lightning. You don't want to practice pole vaulting in a thunderstorm just because it's unlikely. Making sure your books are accurate and your taxes are filed on time is one of the best ways to keep your head down during tax season. Check out Vincere's take on tax season!

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This post is just for informational purposes and is not meant to be legal, business, or tax advice. Regarding the matters discussed in this post, each individual should consult his or her own attorney, business advisor, or tax advisor. Vincere accepts no responsibility for actions taken in reliance on the information contained in this document.