College Graduate's Guide to Filing the First Tax Return
Last Updated: March 17, 2014
Now that you have graduated from college and obtained your first real job - it's official, you're an adult. While being an adult has its benefits, you will quickly find that there are responsibilities that come with those benefits. For instance, that paycheck that you've been earning from your first grown-up job requires you to file your first grown-up tax return.
Before you panic, you should know that filing your tax return can be a relatively painless experience. There are only a few simple steps you will need to follow to ease your way over this milestone experience. Hopefully, with an investment of a few hours' time, you'll be back to enjoying your newfound adulthood.
Do-It-Yourself vs Professional Help
The first step in filing your income taxes is deciding who is going to prepare your return. Will you do it yourself? There are many different websites and software programs that will help you through the process. Would you prefer to have a professional complete your return? Although a tax preparer costs more than the computer-based preparation methods, you could find that talking to a real person is worth the additional cost if you have a complicated return. Only you can decide, however, which method makes you the most comfortable.
Start to Gather All Required Documentation
Now that you have decided who is going to do the tax return, it is time to start gathering all of the required documents. Whether you're going to a preparer's office or doing your return in the comfort of your own home, you'll still appreciate having everything in one place. You should start by pulling out your copy of last year's returns, if you filed one. Looking over the previous year's return and considering what things have changed is a good starting point for you or the preparer. In addition, you'll need to gather your W-2's (the record of your earnings from your employer), 1099's (a contract worker's equivalent of a W-2), investment information, statements from your college or the company that financed any student loans, and if you lucky enough to purchase a house, you will need all the 1098's for the interest you have paid.
Fill Out the Return
Now it's finally time to take on the tax return itself. If you're using a tax professional, you'll spend a large part of your appointment time telling him about yourself. He'll need to know how many places you've worked in the past year, if you own or rent your home, and even if you're still paying your educational expenses. Individuals preparing their own tax returns will need to input this same type of information into the preparation software. Fortunately, there are some pretty user-friendly programs that will ask you these questions in an interview format much like being questioned by a live person. By the time you complete the interview, your tax return is well on its way to being done. In no time, your return will be transmitted electronically or printed and prepared to mail.
Keep a Copy For Your Records
The final step to filing your income tax return is to make copies of everything you have submitted to the IRS and to file this away in a safe place. Remember that the IRS can request additional documentation to substantiate your return for as many as seven years, so make sure you know where you placed your return. Good record keeping will be its own reward in a year when you get to start this process all over again.