Filling Out a Tax Return for the First Time

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Filing your taxes for the first time involves getting a lot of rules right on the first try, and there are points that you might not be familiar with. It takes patience and attention to detail, but it really isn't all that difficult when you have a basic understanding of the process.

In this guide, those filing for the first time—or those who have done it before and need further guidance—will learn everything they need to get started, including what basic terms mean and what forms you'll need.

Key Takeaways

  • You likely owe the government a portion of your income and earnings, which is achieved through the U.S. tax system.
  • Typically, you have until April 15—April 18 in 2022—to file your taxes appropriately either electronically or by mail.
  • The IRS offers five filing statuses, and whichever one you choose impacts your standard deduction and other rules.
  • You can reduce the amount of money you owe to the IRS with tax breaks like credits and deductions.
  • While you can file your taxes on your own by hand, it is often recommended to use digital tax software or applications, as well as have your paperwork reviewed by a tax professional.

Tax Basics

The U.S. tax system boils down to this: You likely owe the government a portion of your income and earnings. Income tax is usually withheld from each of your paychecks by your employer throughout the year, based on what you'll probably owe. Certain factors can affect how much you'll owe, such as your marital status, the number of dependents you have, and tax breaks that you're entitled to claim.

You won't know for sure whether you've overpaid or underpaid through withholding until you prepare your tax return. And if you've overpaid, you'll receive a refund. You must pay the difference by the filing date, usually April 15, if you underpaid. In 2022, the year in which you'll file your 2021 tax return, the official filing deadline is Monday, April 18.

How to Start Filing Your Taxes

Using tax software is one of the easiest ways to prepare your tax return. These programs ask you some questions about your financial habits and income, then the programs will fill out the appropriate forms for you, based on your answers.

The Free File Alliance is another option, but it is limited to eligible individuals. The IRS has partnered with select tax software providers, including TaxAct and TaxSlayer, to provide free preparation of returns for taxpayers who earned $73,000 or less in 2021.

Some tax software or providers have lower income limits and other qualifying rules, but you can choose the one that best suits you.

Note

Some software also offers free versions, such as TurboTax Free Edition and Cash App Taxes (formerly Credit Karma Tax), but only if you have a very simple tax situation, and income limits might apply as well. If you are comfortable preparing your own taxes, the IRS also offers Free File Fillable Forms, regardless of income, that can be printed out, used to file your returns, and sent electronically or by mail.

Review Your Tax Documents

Once you've decided how you will file your taxes, gather your W-2 forms and any other tax documents you might have received after the beginning of the new year, such as 1099 forms.

You'll have just one W-2 if you work one job. You might have multiple 1099s if you have any interest or dividend income, or if you work as an independent contractor. Each financial institution should send you a 1099, as should any business or entity that paid you more than $600 over the year for non-employee services. All paperwork should arrive before Feb. 1, 2022.

Read all the boxes on your W-2s. Each is labeled. They'll tell you how much you earned overall and how much you paid in taxes over the year through wage withholding.

Note

These documents are the starting point of your return, whether you file on paper by hand or use software to file electronically.

Know Your Filing Status

The IRS offers five filing statuses, and choosing the correct one is important, because it determines your standard deduction and affects other rules.

  • Single: You've never married, or you're legally divorced or separated by court order.
  • Married filing jointly: You're married, and you and your spouse file a single, joint return together.
  • Married filing separately: You're married, but you and your spouse elect to file separate tax returns.
  • Qualifying widow(er): You were married, but your spouse died during the last two years. You must have a dependent child to qualify for this status, and you can only use it for two years after the year in which your spouse died.
  • Head of household: With this label, you're "considered unmarried." You might still be legally married to your spouse, but you didn't live together at any time during the last six months of the year. You must additionally have a qualifying dependent who lives with you, and you must pay for more than half the cost of maintaining your home during the tax year. Other rules apply as well.

Note

The rule to qualify for the head of household and qualifying widow(er) filing statuses can be particularly complex, so you might want to check with a tax professional to make sure you qualify before you claim either of them.

Effect of Deductions and Credits

You won't have to pay tax on all the earnings that appear in box 1 of your W-2 form, because you're entitled to claim at least one tax break. Tax breaks come in the form of tax deductions and tax credits. While tax deductions reduce the portion of your overall income that you must pay taxes on, tax credits subtract directly from what you owe the IRS.

The most important tax benefits for young people are those that impact student loan interest and college education expenses, and credits that can help you save for retirement. Other common credits include the Child Tax Credit, the Credit for Other Dependents, the Earned Income Tax Credit, and the American Opportunity Credit, which is an educational credit.

Note

Prior to the Tax Cuts and Jobs Act (TCJA) that went into effect in 2018, you could subtract personal exemptions from your taxable income for yourself, your spouse, and each of your dependents. That ended following 2017.

The Standard Deduction

The standard deduction is a specified amount that the IRS lets you subtract from your income, and it varies according to your filing status. For the 2021 tax year, the standard deductions are as follows:

  • Single taxpayers: $12,550
  • Married couples filing separately: $12,550
  • Married couples filing jointly or qualifying widow(er): $25,100
  • Heads of household: $18,800

These deductions are indexed for inflation annually, so they tend to increase a little each year. They're set at $12,950 for single taxpayers and married couples filing separately, $25,900 for married couples filing jointly and qualifying widow(er)s, and $19,400 for heads of households in the 2022 tax year.

Itemizing Your Deductions

You can claim the lump-sum standard deduction, or you can itemize your deductions instead. Itemizing involves listing every qualifying expense you paid all year and entering the information on a separate form—Schedule A—that must accompany your tax return when you submit it. It's an either/or choice. You can't claim the standard deduction and itemize expenses, too.

Note

It only makes sense to itemize if the total of all your paid, qualifying expenses exceeds the amount of the standard deduction for your filing status. Otherwise, you'd be paying taxes on more income than you'd have to.

Some taxpayers are prohibited from claiming the standard deduction, so they must itemize. This would be the case if you're married, you and your spouse are filing separate returns, and your spouse has already filed and itemized their deductions. You must then do the same on your own return.

You must also itemize if you're a nonresident or dual-status alien at any time during the tax year, with some exceptions, according to the IRS.

How Tax Credits Work

Credits can be either refundable or non-refundable, and both are applied first to any tax you owe. A non-refundable credit can either reduce or erase that amount. You might owe the IRS $800, then realize you can claim a $1,000 non-refundable credit, for example. That would eliminate your tax debt—you wouldn't owe the IRS anything—but the IRS would keep the $200 remaining balance.

The IRS would send you $200 if the credit you were able to claim was refundable.

Understanding Tax Brackets

Your filing status affects your tax rate. There are many rates (or brackets), each spanning a different portion of your income, and the income spans vary, depending on your filing status. The more you earn, the higher the percentage tax rate becomes on your top dollar.

For example, in 2021 the top tax rate is 37% for an individual single taxpayer with an income greater than $523,600. The lowest income rate is 10% for a single filer with an income of $9,950 or less. These figures increase to $628,300 and $19,900, respectively, if you are married filing jointly.

Tips for Preparing Your Tax Return

You might want to try completing your return on paper, too, even if you elect to use tax preparation software. This will let you see whether your calculations on paper match up with the calculations in the software, and it can be a learning experience. As mentioned, the IRS provides a list of forms you can use to help, and they're free.

Consider visiting a tax professional, and have them look over your forms when you've finished filling out your return, too. Make an appointment in advance, especially if it's getting close to the tax-filing deadline. Let the office know that you just want someone to review your return prior to the IRS receiving it. Many tax offices will do that for free or for a nominal charge.

Updated by
Jess Feldman
jess feldman in a white shirt
Jess Feldman has been writing and editing for over five years, and currently focuses on financial topics. As an associate editor on the special projects team, she writes, edits, and develops tentpole brand projects across a variety of platforms. Since joining the financial space, she's developed an interest in finding ways to make the complex topic of finance relatable to younger generations, specifically via TikTok. Jess has a journalism degree from the University of Maryland Philip Merrill College of Journalism.
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  1. Internal Revenue Service. "Topic No. 301 When, How, and Where to File."

  2. Internal Revenue Service. "IRS Free File Online: Browse All Offers."

  3. Internal Revenue Service. "About Form 1099-MISC, Miscellaneous Income."

  4. Internal Revenue Service. "Reporting Payments to Independent Contractors."

  5. Internal Revenue Service. "January 31 Wage Statement Deadline Reminder for Employers."

  6. Internal Revenue Service. “Publication 501 (2021): Dependents, Standard Deduction, and Filing Information,” Pages 5-11.

  7. Internal Revenue Service. "Publication 5307: Tax Reform Basics for Individuals and Families," Page 7.

  8. Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2021."

  9. Internal Revenue Service. "IRS Provides Tax Inflation Adjustments for Tax Year 2022."

  10. Internal Revenue Service. "Topic No. 501 Should I Itemize?"

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