If you’re like most of my readers here then YAY you’re officially adulting! And while that is super exciting in a lot of ways, it is also kind of terrifying. You now have to learn to do so many things you never had to before, and that includes filing your taxes every year.
Since it’s probably your first time filing by yourself, if your parents are no longer filing for you as their dependent, then you want to be sure you don’t make any rookie mistakes. Filing taxes online as a 20-something can be a real headache if you’re not prepared.
It may seem daunting and a bit scary because you don’t really know what you’re doing, let’s be real; however, it is more simple than you think. Being prepared is half the battle.
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Don’t worry though, I’ve broken down how to file taxes online as a 20-something into 5 easy and manageable steps.
Step 1: Research Whether You Need To File Taxes Online As A 20-Something Or Not
As a write this, we are entering the 2019 tax filing season in the United States of America. The past year, in 2018, anyone that was filing as a single under the age of 65 that made $12,000 was required to file their tax return.
If you filed as a dependent under your parents but made over $6,350 in the income you may still need to file, as of the 2018 tax year. Review the information in more detail here to make sure you are accurate when you file taxes online as a 20-something. These numbers are subject to change.
Once you determine if you need to file taxes online as a 20-something, it is time to understand the process a little bit deeper.
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Step 2: Know What Credits & Deductions There Are When You File Taxes Online As A 20-Something
What are tax credits and deductions anyways? They are something you can claim on your tax bill when you file taxes online as a 20-something to help you reduce your tax bill in different ways. I love them and they are so satisfying because they help you out big time.
A tax deduction reduces how much of your income is subject to taxes. By lowering your taxable income based on your federal income tax bracket, you could be saving hundreds of dollars.
A tax credit is slightly different in that it directly reduced the amount of tax you owe. It is dollar-for-dollar and not a percentage like a tax reduction. Still confused? Be sure to check out https://www.irs.gov/ and this helpful article by Nerd Wallet.
There are so really cool credits and deductions you may qualify for as a 20-something that you may not even know about. For example, if you are not a full-time student, are not being claimed as a dependent, and contribute to a retirement plan (which you should be doing!) then you may be eligible for the saver’s credit.
The saver’s credit has a lot of different factors that go into it like the filing status and your adjusted gross income. In 2018, if your filing status was under $31,500 you would be eligible. And if you are filing jointly or married the amount is $63,000 or less. Please note these numbers are subject to change from year to year.
Related Post: How To Manage Your First Real Paycheck After College
If you are still paying off student loan interest then you can also deduct off of your interest payments. In 2018, that was up to $2,500 and based on your adjusted gross income as well.
I firmly believe it is so important to donate part of your income, whether that is tithing at church, giving back to your school, or donating to your favorite non-profit. Giving back is a great way for you to make an impact in this world and help others. And another awesome part of that is that most of those donations are tax deductions this time of year.
Charitable donations are great to include in your itemized taxes as you file taxes online as a 20-something.
If you are self-employed or take on freelance work, you may be able to claim deductions based on the expenses related to your work. For example, I share Young Living Essential Oils on the side and as a result, I have expenses like going to the post office and mailing packages or buying office supplies.
You can sign up for a FREE e-course on essential oils here if you want to learn more! Or sign up for this form below:
The IRS also lists family and dependent credits, income and savings credits, homeowner credits, health care credits, and education credits on this page: https://www.irs.gov/credits-deductions-for-individuals to help you see what you may qualify for and what you can deduct.
Deductions will often play a big part in your tax filing when you file taxes online as a 20-something so be on the lookout for ways you can apply them and don’t forget to look through your receipts and emails to see if any are hiding in there.
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Step 3: Gather The Necessary Documents To File Taxes Online As A 20-Something
Knowing the documents you need and getting those prepared is a huge step toward filing your taxes.
Those documents include W-2(s) from your jobs telling you your income and the taxes withheld, 1099s for other income under self-employment, 1099-INT for interest on checking or savings account, 1099-DIV from stocks or mutual funds that pay out dividends,1098s from student loans or education bills, 5498 from IRA, 1095s for health insurance and other ones that are mailed out to you.
Employers are required to mail out the W-2 before the month of February, meaning you should receive it sometime between January 1st and 31st. If you do not, reach out to your employer as it may have got lost in the mail or reached the wrong mailbox.
You won’t even be able to file until you have that W-2 form or 1099 from all the places you were employed, so be sure you get those before you start the process at all.
After you get all these documents you have about two months to file taxes online as a 20-something since the deadline is April 15. The earlier you file the better. You can avoid tax-related identity theft better and get your tax refund sooner if you qualify for one.
Filing earlier will also give you less stress and make it easier for you to enjoy your life instead of always having this deadline hovering over you and slowly catching up each day. There are extensions available sometimes but if you owe money, that would still need to be paid by April 15.
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Step 4: File Taxes Online As A 20-Something Here
Now we get to the part where you do the second half of the work and begin filing online. It is not required to file online, but almost everyone who does their tax return themselves does, as it is more convenient and makes things simple.
If you don’t want to file online, you can do it by mail as well. Your city’s library would have forms available in the lobby around February, March, and April and more instructions on how to go about this process.
You could also get in-person help from a tax accountant if you do not want to do any of it yourself. However, be sure to check online with the IRS that they are registered tax preparers and avoid being scammed.
I also don’t recommend doing it by mail because you will have to do some math yourself, and if you mess up that’s on you. Let online software do it for you so that you avoid any mistakes and you can avoid any fees related to mistakes on your tax form.
Online software is so simple to use and keeps all the headaches away. The software will walk you through the entire process one step at a time. It includes instructions on each section you come to and gives you options on what to itemize.
While there are a couple of good options out there, the best is by far H&R Block. They offer free services to taxpayers and estimated that they prepared over 23 million tax returns last year, in 2018. Talk about reliability!
H&R Block gives you a few different options when you get to their home page. Select the online-only service to file for free. You won’t even have to set up an account right away if you don’t want to.
It is also important to note that H&R Block is completely updated and ready for the recent tax changes that happened under President Trump’s new tax laws. I’m not sure we can say that about every online tax software.
Next, you’ll just follow the steps they prompt you to. It’s really that simple!
I love H&R Block because they make it so easy to file taxes online as a 20-something. The do-it-yourself software and preparation service, combined with 12,000 retail offices around the country, will help you get the maximum refund, and we all need that!
Everything is straightforward and easy to use, and the free version is the best on the market. I wouldn’t even think about filing my taxes anywhere else.
Still leary? You have access to live, on-demand tax pros to help you if you need a real human to talk to. So give H&R Block a shot today.
Filing online is amazing as well because you can select direct deposit as a way to receive your tax refund. It usually comes within three weeks of filing online, which is usually much faster than by mail.
Step 5: Prepare For Next Year To File Taxes Online As A 20-Something
Let’s be real, if you felt unprepared this year and couldn’t seem to keep all thing organized, you’re going to go through the exact same next year unless you are intentional and make some necessary changes today.
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While you are filing your taxes this year, make a list of all the forms you gathered. Then save the list on your phone, computer, or paper where you will be able to easily access it next year.
This is so important because I am all about setting up the right habits in our 20s. Our 20s are a defining decade and it is so important that we invest in our lives now so that the remainder of our lives can be lived successfully and in the best possible way. Don’t squander away your 20s because you want to “live it up.”
You can still have fun and still enjoy your 20s but making meaningful and powerful decisions now will be what drives the rest of your life forward.
Ok, rant over. Let’s get back to being intentional. We want to be intentional in every area of our lives, especially in our 20s, so that’s why we have to be intentional about keeping our documents and forms organized.
Don’t worry, I’m preaching to the choir here now too. For a long time, I was never organized in this way. I mean there really is nothing fun about and it only comes once a year which is pretty far ahead to look at. Yet, every year I would be scrambling again to try to file taxes online as a 20-something.
It sucks to feel the weight of “ugh, not again” happen every spring when the tax deadline of April 15 approaches. So, do your future self a favor and take action. Make positive decisions now that will form the best possible habit for the rest of your life.
After you make that list the next thing is to just add to it all year long. Keep receipts of charitable donations. For example, when I drop something off at goodwill and they hand me the receipt, I store it in a file. I also do this with the post office receipts of expenses I can deduct for my essential oils business.
You should also hold onto medical bills, statements from student loans, and anything else that may be necessary.
The IRS typically recommends keeping records of your tax information for three years and shredding it after that, so stay organized throughout the year and prepare for next year.
So how did it go as you file taxes online as a 20-something with H&R Block? Did you find that it was even more simple than you think? Let me know in the comments below!
If you still have yet to file taxes online as a 20-something, then what are you waiting for? Take positive action today and get started with H&R Block before you are stressed to the max.
Don’t forget the last day to file taxes online as a 20-something is April 15. Get your stuff in and on time and everyone will be a happy camper.
Kelsey at GoodPointGrandma
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This is such a good list of things to do! My taxes are still daunting, so I go to a CPA, but one day, I’ll do them online!
Thanks so much, I’m glad I could help(:
Taxes can be overwhelming, and you really broke it down here into easy to follow steps. Thanks for sharing these tips!
Thanks, Kait! They really can be, I hope this guide can help a lot of people(:
Ugh . . . adulting. And taxes? Even worse. This looks like a fairly simple way to get them done. Thanks, Kelsey!
Glad I could help Rebekah! It’s so nice when things get a little simpler.
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