Filing Taxes for the First Time: A Simple Guide

Quick answer

• Gather all your income documents (W-2s, 1099s).
• Determine your filing status (Single, Married Filing Jointly, etc.).
• Choose a filing method: tax software, professional preparer, or free IRS resources.
• Understand common deductions and credits you might qualify for.
• Double-check all your information before submitting.
• Keep copies of your tax return and supporting documents.

What to check first (before you file or change withholding)

Filing Status

Your filing status significantly impacts your tax brackets, standard deduction amount, and eligibility for certain credits. The most common statuses are Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er). Choose the status that best reflects your situation for the tax year.

Income Sources

Identify all forms of income you received during the tax year. This includes wages from an employer (W-2 forms), income from freelance or contract work (1099 forms), interest from savings accounts, dividends from investments, and any other taxable earnings. Missing income can lead to penalties.

Withholding or Estimated Payments

If you are an employee, your employer withholds taxes from each paycheck based on the W-4 form you provided. If you are self-employed or have significant income not subject to withholding, you may need to make estimated tax payments quarterly to the IRS. Review your withholding to ensure you are not overpaying or underpaying.

Deductions and Credits

Deductions reduce your taxable income, while credits directly reduce your tax liability. Common deductions include those for student loan interest or self-employment expenses. Common credits include the Earned Income Tax Credit or education credits. Research which ones you might be eligible for.

Deadlines and Extensions

The primary tax filing deadline in the U.S. is typically April 15th. If this date falls on a weekend or holiday, it shifts to the next business day. You can file for an extension, but this only extends the time to file, not the time to pay any taxes owed.

Step-by-step (simple workflow)

1. Gather Your Documents: Collect all W-2s from employers, 1099s for freelance or other income, and any other relevant tax forms (e.g., 1098 for mortgage interest, 1098-E for student loan interest).

• What “good” looks like: You have every document that reports income or significant deductible expenses.
• Common mistake: Forgetting about income from side gigs or investment accounts. Always check your bank statements for deposits that aren’t from your primary employer.

2. Determine Your Filing Status: Review the IRS guidelines for Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er).

• What “good” looks like: You’ve confidently selected the status that accurately reflects your personal circumstances for the tax year.
• Common mistake: Choosing a status that offers a lower tax benefit or isn’t legally permissible for your situation. Consult IRS Publication 501 if unsure.

3. Choose Your Filing Method: Decide whether to use tax preparation software, hire a tax professional, or utilize IRS Free File or other low-cost options if you qualify.

• What “good” looks like: You’ve selected a method that fits your budget, complexity, and comfort level with tax preparation.
• Common mistake: Overpaying for tax software or a preparer when free options are available and sufficient for your needs.

4. Enter Your Personal Information: Fill in your name, address, Social Security number, and your chosen filing status accurately.

• What “good” looks like: All personal details match your Social Security card and other official documents.
• Common mistake: Typos in your Social Security number or name, which can delay your refund or cause rejection.

5. Report All Income: Enter the amounts from your W-2s, 1099s, and any other income sources.

• What “good” looks like: Every dollar earned is accounted for on your return.
• Common mistake: Not reporting “gig” income or cash payments, which the IRS can often trace.

6. Identify Potential Deductions: Review your expenses to see if you qualify for any above-the-line (adjustments to income) or below-the-line (itemized) deductions.

• What “good” looks like: You’ve claimed all legitimate deductions you’re entitled to, reducing your taxable income.
• Common mistake: Claiming deductions you don’t have documentation for or aren’t eligible for.

7. Identify Potential Credits: Look for tax credits you may qualify for, such as education credits, child tax credits, or the Earned Income Tax Credit.

• What “good” looks like: You’ve claimed all credits that reduce your tax bill dollar-for-dollar.
• Common mistake: Confusing deductions with credits; credits are generally more valuable.

8. Calculate Your Tax Liability: The tax software or preparer will help calculate your total tax based on your taxable income and filing status.

• What “good” looks like: Your tax liability is accurately calculated according to IRS tax tables.
• Common mistake: Using incorrect tax tables or software that hasn’t been updated for the current tax year.

9. Determine Your Refund or Amount Due: Compare your total tax liability with the amount of taxes already withheld or paid through estimated payments.

• What “good” looks like: You clearly see if you are due a refund or owe additional tax.
• Common mistake: Miscalculating withholding or estimated payments, leading to a surprise balance due or a smaller refund than expected.

10. Review and Sign: Carefully review your entire tax return for accuracy before signing.

• What “good” looks like: You’ve proofread all sections and are confident in the information provided.
• Common mistake: Missing a simple data entry error that could lead to an IRS notice.

11. File Your Return: Submit your return electronically (e-file) or by mail by the deadline.

• What “good” looks like: Your return is successfully transmitted to the IRS.
• Common mistake: Filing too close to the deadline and missing it, or making errors in the e-filing process.

12. Keep Records: Save a copy of your filed tax return and all supporting documents for at least three years.

• What “good” looks like: You have a secure place to store your tax records for future reference or audits.
• Common mistake: Discarding important documents before the IRS statute of limitations has passed.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Incorrect Social Security Number	Return rejection, delayed refund, potential penalties.	Double-check all SSNs for yourself, spouse, and dependents before submitting.
Missing income (e.g., freelance)	Underpayment penalty, interest, potential audit.	Report all income from all sources. Use bank statements to catch undeclared income.
Incorrect filing status	Higher tax liability or missed deductions/credits.	Review IRS guidelines for each status (Single, Married Filing Jointly, Head of Household, etc.) carefully.
Math errors	Incorrect tax calculation, either overpaying or underpaying.	Use tax software or have a professional review your return. Double-check manual calculations.
Claiming ineligible deductions/credits	IRS notice, penalties, interest, repayment of credits.	Only claim deductions and credits for which you meet all IRS requirements and have supporting documentation.
Forgetting to sign and date	Return is considered not filed, leading to penalties and interest.	Always sign and date your tax return before submitting. E-file confirmations serve as your electronic signature.
Not filing by the deadline	Penalties and interest on any unpaid tax.	File on time, or file for an extension and pay any estimated tax due by the original deadline.
Not keeping records	Difficulty responding to IRS inquiries or audits, potential inability to claim future deductions.	Store copies of your tax returns and all supporting documents (W-2s, 1099s, receipts) for at least three years.
Errors in bank account information	Refund sent to the wrong account or delayed significantly.	Verify your routing and account numbers for direct deposit refunds multiple times.
Incorrect dependent information	Rejection of return, denial of credits, potential penalties.	Ensure dependents meet IRS criteria and their SSNs are entered correctly.

Decision rules (simple if/then)

• If you received a W-2, then you must file a tax return because your employer has reported your wages to the IRS.
• If you are self-employed with net earnings of $400 or more, then you likely need to file a tax return and pay self-employment taxes because these earnings are taxable.
• If you had federal income tax withheld from your paychecks, then filing a return is the only way to claim a refund if you overpaid.
• If you are married and both spouses have income, then filing jointly may be beneficial because it can result in a lower tax liability than filing separately.
• If you have significant unreimbursed medical expenses, then you might be able to itemize deductions, which could lower your taxable income.
• If you paid for education expenses for yourself or a dependent, then you may qualify for education tax credits, which directly reduce your tax bill.
• If you are a student with income, then you may need to file a return even if your income is below the filing threshold to get a refund of withheld taxes.
• If you received unemployment compensation, then you must report it as taxable income, and you may have had taxes withheld from it.
• If you are unsure about your tax situation, then it’s best to consult a tax professional or use reputable tax software designed for beginners.
• If you are concerned about owing a large amount of tax, then you should adjust your W-4 with your employer or make estimated tax payments to avoid penalties.
• If you are a first-time filer with a simple tax situation, then IRS Free File or a basic tax software program is likely a good and cost-effective option.
• If you owe taxes and cannot pay, then contact the IRS about payment options, such as an installment agreement, rather than ignoring the debt.

FAQ

What is the deadline to file my taxes?

The typical deadline is April 15th each year. If it falls on a weekend or holiday, the deadline moves to the next business day.

Do I need to file if I didn’t earn much money?

You generally need to file if your gross income exceeds a certain threshold, which depends on your filing status and age. Even if not required, you may want to file to claim a refund of withheld taxes.

What’s the difference between a deduction and a credit?

A deduction reduces your taxable income, while a credit directly reduces the amount of tax you owe, dollar for dollar. Credits are generally more valuable.

Can I file my taxes for free?

Yes, if your adjusted gross income is below a certain amount, you may be eligible for IRS Free File. Many tax software programs also offer free filing for simple returns.

What if I can’t pay the taxes I owe?

The IRS offers payment options, such as installment agreements or an offer in compromise. It’s crucial to communicate with the IRS if you cannot pay the full amount by the deadline to avoid further penalties.

How long should I keep my tax records?

You should keep copies of your tax returns and supporting documents for at least three years from the date you filed them. Some situations require keeping records longer.

What is a W-4 form?

A W-4 form is what you fill out for your employer to tell them how much federal income tax to withhold from your paycheck. Adjusting it can affect your refund or tax due.

What is an SSN?

An SSN, or Social Security Number, is a unique nine-digit number assigned to U.S. citizens, permanent residents, and temporary (working) residents for tracking earnings and benefits. It’s essential for filing taxes.

What this page does NOT cover (and where to go next)

• Complex Investment Income: Details on capital gains, options trading, or cryptocurrency. Consider consulting an investment tax specialist.
• Self-Employment Tax Details: In-depth calculations for freelancers, independent contractors, or small business owners. Explore IRS Schedule C and SE instructions.
• State and Local Taxes: Filing requirements and specific forms for your state or city. Check your state’s Department of Revenue website.
• Retirement Planning and Tax Implications: Advanced strategies for IRAs, 401(k)s, and pension plans. Consult a financial advisor or retirement planning expert.
• Inheritance and Estate Taxes: Rules for receiving or distributing assets after someone’s passing. Seek advice from an estate attorney or tax professional specializing in estates.