{"id":361853,"date":"2022-04-13T07:00:00","date_gmt":"2022-04-13T13:00:00","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=361853"},"modified":"2022-04-18T11:14:04","modified_gmt":"2022-04-18T17:14:04","slug":"filing-first-time-taxes","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/finance\/filing-first-time-taxes\/","title":{"rendered":"Your guide to filing taxes for the first time"},"content":{"rendered":"\n
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Disclosure regarding our editorial content standards.<\/a><\/p>\n\n\n\n

Doing your taxes can seem complicated, especially because the consequences of getting them wrong  can be high. You could be charged a fine, asked to refile or audited if you make a serious mistake. Luckily, once you get the basics down, you\u2019ll find your taxes aren\u2019t so challenging after all. And to help guide you, here are some handy tips to know when filing taxes for the first time. <\/p>\n\n\n\n

What are taxes and why do I have to pay them?<\/h2>\n\n\n\n

Taxes are mandatory financial contributions every individual and business must pay to the local, state and federal governments. It can feel like taxes take away your hard-earned money, but they play a key role in keeping society functioning. Taxes pay for schools for children, firefighters for communities, construction on local roads and more. <\/p>\n\n\n\n

It\u2019s important to note that while almost everyone is subject to paying taxes, how much you pay can significantly vary. The government sets tax brackets to determine what tax percentage an individual pays based on their annual income. The more someone makes, the more of their income will go to taxes. <\/p>\n\n\n\n

In 2021, the lowest tax bracket for single income filers was 10 percent for anyone making up to $9,950. In comparison, the highest tax bracket was 37 percent for income earned over $523,600. <\/p>\n\n\n\n

These differences are put in place so high-income earners who are more financially secure can be the ones who contribute the most to society. <\/p>\n\n\n\n

How do I file taxes for the first time?<\/h2>\n\n\n\n

If you\u2019re filing your taxes for the first time this year, follow these steps: <\/p>\n\n\n\n

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1. Determine if you need to file this year<\/h3>\n\n\n\n

First, you want to verify that you actually need to file your taxes this year. Factors like your marital status, age and income can determine if you need to file or not. For example, in 2021, those who are single, under the age of 65 and earned less than $12,550<\/a> don\u2019t have to file taxes. Note that it\u2019s important to check these qualifying factors every year as they can be updated. <\/p>\n\n\n\n

2. Gather your resources<\/h3>\n\n\n\n

Next, you’ll want to gather everything you’ll need to file your taxes. The first thing you’ll collect is your income tax forms. If you have an employer, you’ll get a W-2 form, while self-employed individuals<\/a> receive 1099 forms. The IRS wants to know about all the income you earned throughout the year, and you must report everything. You’ll even receive forms from financial institutions if you earned more than $10 in interest income. <\/p>\n\n\n\n

If you plan to claim deductions and credits, you’ll also need to gather the relevant documents for those. Everything has to be claimed to the exact amount, and you should maintain receipt copies in case you’re asked to verify a charge. <\/p>\n\n\n\n

Lastly, you’ll need to understand your filing status. The status options are:<\/p>\n\n\n\n