April 17 is right around the corner, and you know what that means? Well, that’s the problem. Not many people, especially college-aged people, know what that means. It’s tax season, and the last day to file your taxes this year is April 17.
Often times, when young people hear the word “taxes,” they think: “Oh, that annoying percentage that gets taken out of my paycheck,” or “My parents file my taxes; I don’t need to worry about that yet.”
If you are a reported employee, you should be filing your taxes each year. If you’re not, you could be missing out on a sweet refund check. According to a U.S. Treasury, around 75 percent of Americans received a refund in 2014 that averaged around $2,700. Why would you want to risk not filing your taxes and forfeiting the money you worked hard for?
The amount of income that you generate in a tax year will determine the amount of tax that you owe or are owed after adjusted for deductions and credits.
“For your taxes this year, if you are under age 65 and single, you must file a tax return if you earn $10,400 or more, which is the sum of the 2017 standard deduction for a single taxpayer plus one exemption.”
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed and varies according to your filing status; there is also an additional standard deduction for individuals who are blind or over the age of 64.
Does everyone need to file their taxes? Actually, no. According to turbo tax, “If your total income for the year does not exceed the standard deduction plus one exemption and you aren’t a dependent to another taxpayer, then you don’t need to file a federal tax return.”
Whether a child or an adult, all taxpayers who are claimed on someone’s tax return as a dependent are subject to different IRS filing requirements. A tax return is necessary when the dependent’s earned income is higher than the standard deduction. In 2017, the standard deduction for a single taxpayer (without an exemption) is $6,350.
If you are required to file your taxes and fail to do so, your credit score will be affected. It is always better to file, even if you file past the April 17 deadline, than to not file at all.
What are the first steps to filing your taxes correctly? First, you want to make sure you received your W-2 for from your employer. The W-2 is a tax form that employers give to their employees at the end of each year. This form includes the total amounts of wages earned, federal and state taxes withheld and contributions to Social Security for a given tax year. After receiving this form from your employer, you must submit this information when filing your taxes with their Form 1040.
Filing your own taxes and understanding exactly what it all means can be one of the not-so-fun parts of growing up.
For me, I had my parents do my taxes until this year when I enrolled in a personal finance course at Cabrini and learned a lot about the elaborate and complex world of taxes. I came to find that doing your own taxes isn’t so scary or difficult and it puts into perspective all your buying and saving decisions that you’re making now that will impact your future.
For people who do not know how to file their taxes on their own, I suggest using a branded tax office like an H&R Block or Turbotax. These offices typically have staff that are trained to ask the right questions to help you get the largest tax refund. They have apps for your phone that makes filing your taxes as quick and painless as possible.
