5 Tips for Filing Your Taxes for the First Time

Are you filing your taxes for the first time?

Are you feeling a bit overwhelmed about the whole process?

Filing a tax return for the first time can be intimidating.

Here are 5 tips to help you through the process.

1. Determine if you need to file

Key factors include filing status, gross income, and age. See the section titled Do You Have To File? for details (pg. 7).

Even if you are not required to file, you should file to get a refund of any federal income tax withheld or to take advantage of the Earned Income Credit (EIC), if eligible.

2. Use the IRS instructions and publications

The TaxACT software provides Step-by-Step Guidance through the Federal and State Q&A interview screens.

On each Q&A screen, there is also a Form Instructions link under the blue Help tab which contains additional information about the entries you are making in the program (see below).

IRS Form Instructions

3. Understand the difference between tax deductions and credits

A deduction will reduce your taxable income. From this taxable income amount, you will figure your tax liability.

A credit will then reduce your tax liability. There are nonrefundable and refundable credits.

A nonrefundable credit can reduce your tax liability to zero, however it cannot result in a refund. If your tax liability is zero, you would not receive this type of credit at all, even though you are otherwise eligible.

A refundable credit can increase your refund or decrease the amount you owe. You may qualify for a refundable credit even if you do not have federal income tax withheld.

4. File your return on time

The IRS publishes its filing deadlines each tax year. For the 2012 tax year, the individual income tax return due date is April 15, 2013.

If you are unable to file by this date, you can apply for a 6-month extension. You can do so by filing Form 4868 or paying your estimated tax due, which can be completed in the TaxACT program.

5. Know the record keeping requirements

Please review the record keeping information outlined in Part I of Your Federal Income Tax (For Individuals- pg 15).

Please note, there may be more detailed record keeping requirements depending on the specific items included on your tax return, such as the itemized deduction for charitable contributions.

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