Doing your taxes for the first time is certainly a rite of passage. It doesn’t have to be as scary as everyone makes it out to be, especially if you keep your financial records well-organized. Online filing programs make it easier than ever to understand what you need to fill out and what you can ignore based on your situation, which can help prevent you from feeling completely overwhelmed while reading the instructions.
As you continue through life, you may experience some major milestones that ultimately affect your taxes. A significant hike in income or wealth building could put you in a higher tax bracket. Getting married changes your filing status, and having children means you can claim dependents.
Typically this means you’ll pay less in taxes, so it’s important to know how these changes — as well as new laws — affect your taxes.
You can actually remain as a dependent on your parent’s taxes until about your mid-twenties if you are currently attending college. If you can, show interest in helping your parents file taxes. Ask them what kind of documents they need to get started. You’ll see what kind of documents are supplied by their employer, the donation receipts and other deductible records that your parents have kept on hand, and their process for navigating the tax documents.
If your parents choose to use a tax professional, go with them to see what kind of documents they drop off.
You can even try to use the same info to fill out the tax forms yourself and see if you reach the same conclusions as the pro or your parents. Identify any discrepancies and learn why they did it a different way.
Don’t have a family member to mentor in this way? No worries. You can browse our directory to find a financial coach with tax experience.
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