file your own taxes for the first time

How to File Your Own Taxes for the First Time: A Complete Step-by-Step Guide to Success

How to File Your Own Taxes: Introduction

The decision to file your own taxes for the first time is a major milestone in financial independence that often feels more intimidating than it actually is. While the stacks of forms and complex terminology might seem overwhelming at first, modern technology and simplified government resources have made the process more accessible for everyone. By taking control of your own filing, you gain a deeper understanding of your finances and ensure that you aren’t leaving any of your hard-earned money on the table.

Understanding the basics is the first step toward a stress-free tax season. The Internal Revenue Service (IRS) provides a helpful step-by-step guide to filing that breaks down the requirements for various types of income. Filing isn’t just a legal obligation; it is also the primary way to claim a tax refund if your employer withheld more than you owe, or to access valuable benefits like the Earned Income Tax Credit (EITC). Even if you aren’t strictly required to file based on your income level, you may still want to check the IRS filing requirements to see if you are eligible for a refund of the taxes already paid from your paychecks.

Step 1: Determine if You Must File

Before you begin the process to file your own taxes for the first time, you need to know if the law actually requires you to do so. Generally, your obligation to file depends on three main factors: your gross income, your filing status, and your age. For most single individuals under the age of 65, you are only required to file a federal tax return if your gross income exceeds the standard deduction for that year. Because these numbers are adjusted annually for inflation, you should always verify the current filing thresholds on the official IRS website.

There are two critical exceptions to this general rule that first-time filers often miss:

  • Self-Employment Income: If you earned more than $400 from “gig economy” work, freelance projects, or a small business, you are required to file a return and pay self-employment tax. This applies even if your total income is below the standard deduction.

  • The Refund Rule: Even if you aren’t legally required to file, you should do so if federal income tax was withheld from your paychecks. Filing is the only way to get that money back as a refund.

If you are unsure about your specific situation, the IRS provides an Interactive Tax Assistant which acts as a simple interview tool to determine your filing status and requirements in just a few minutes.

Step 2: Gather Your Tax “Ingredient List”

Once you’ve confirmed that you need to file, the next phase in learning how to file your own taxes for the first time is gathering your paperwork. Think of this as preparing your ingredients before you start cooking; having everything in front of you prevents errors and saves you from having to restart the process later.

You will need three main types of information:

Personal Identification

  • Social Security Numbers: You will need your own SSN (or ITIN) and the SSNs of any dependents you may be claiming.

  • Bank Information: To receive your refund as quickly as possible, find your bank’s routing and account numbers for direct deposit.

Income Documents

  • Form W-2: If you are an employee, your employer must send you this by the end of January. It lists your total earnings and the taxes already withheld.

  • 1099 Forms: These are for “miscellaneous” income. You might receive a 1099-NEC for freelance work or a 1099-INT for interest earned in your savings account.

  • 1099-K: If you sold items on platforms like eBay or Etsy, or received payments via Venmo for business purposes, you may receive this form for third-party payment transactions.

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Education and Deduction Records

  • Form 1098-T: If you paid for college or vocational school, this form is essential for claiming education tax credits like the American Opportunity Tax Credit (AOTC).

  • Form 1098-E: This reports any interest you paid on student loans, which can often be deducted from your taxable income.

Having these documents organized in a single folder—whether physical or digital—will make the actual data entry portion of the filing process feel like a breeze.

Step 3: Choose Your Filing Method

Choosing the right platform is the most important decision you’ll make when you file your own taxes for the first time. Many people mistakenly believe they have to pay hundreds of dollars for professional software, but if you have a relatively simple financial situation, you can often file for free.

Here are the best ways to submit your return without breaking the bank:

  • IRS Free File: If your income is below a certain threshold (usually around $79,000–$84,000, adjusted annually), you can use brand-name tax software at no cost. You must access these offers through the official IRS Free File website to ensure you aren’t charged for federal filing.

  • Truly Free Software: Some platforms, such as FreeTaxUSA, offer free federal filing for everyone, regardless of income level. They handle complex situations like student loans and freelance income without “upselling” you to a paid version.

  • VITA Program: If you prefer a human touch, the Volunteer Income Tax Assistance (VITA) program offers free in-person tax prep for those who generally earn $67,000 or less, persons with disabilities, or limited English-speaking taxpayers.

  • MilTax: For active-duty service members and their families, the Department of Defense provides MilTax, which includes specialized software and consultant support.

For most beginners, guided software is the best choice because it uses a “question-and-answer” format. Instead of looking at a scary form, you’ll simply answer questions like, “Did you have a job?” or “Did you pay for college?” and the software will fill in the boxes for you. (Note: The  IRS Free File website closes down in fall and  will open sometime in late January)

Step 4: Step-by-Step Walkthrough of the Process

Now that you have your tools and documents ready, it is time to actually file your own taxes for the first time. Most modern tax software uses a guided, interview-style format that simplifies the process into a series of “yes” or “no” questions. This eliminates the need to manually fill out confusing paper forms and ensures that the math is handled automatically.

Entering Personal Data

The first phase involves setting up your profile. Accuracy is critical here; ensure your name and Social Security Number match exactly what is printed on your Social Security card. If you are expecting a refund, this is also where you will provide your banking details. Using direct deposit is the fastest and most secure way to receive your money from the IRS.

Reporting Your Income

Next, the software will ask you to input your earnings. For most beginners, this simply means copying the data from your W-2 into the corresponding boxes on the screen. If you have multiple jobs or freelance income, you will repeat this process for each form. The software will then calculate your Adjusted Gross Income (AGI), which is the number used to determine your final tax bracket and eligibility for certain credits.

Choosing Your Deduction

One of the most important steps is deciding how to reduce your taxable income. You have two choices:

  • The Standard Deduction: This is a fixed dollar amount that reduces the income you’re taxed on. Most first-time filers choose this because it is simple and usually provides the largest tax break.

  • Itemized Deductions: This involves listing specific expenses like medical bills, mortgage interest, and charitable donations. You should only itemize if the total of these expenses is higher than the standard deduction amount. You can learn more about this choice by reviewing IRS Topic 501: Should I Itemize? to see which path saves you more money.

Step 5: Review, Sign, and Submit

Before you hit the final “Submit” button, the most critical part of learning to file your own taxes for the first time is performing a thorough quality review. Even a tiny typo in a Social Security Number or a bank routing number can cause the IRS to reject your return or delay your refund by weeks. Most software will provide a “review” or “diagnostic” mode that flags missing information, but you should still manually verify that your name, address, and financial figures match your physical documents.

Validating Your Identity

Because this is your first time filing, the IRS needs to verify that you are who you say you are. When the software asks for your “Prior Year Adjusted Gross Income (AGI),” first-time filers should enter $0 (zero). This is a common point of confusion, but since the IRS has no record of a return for you from the previous year, zero is the correct “password” to pass their security check. You can find more details on this authentication process via the IRS guide on validating your identity.

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The Electronic Signature

Instead of signing a piece of paper, you will use a Self-Select PIN. This is any five-digit number (except all zeros) that you choose to act as your digital signature. Write this number down! You may need it next year to verify your identity when you file again.

Submitting Your Return

Once you are satisfied, you will officially “e-file” your return. Filing electronically is significantly faster and more secure than mailing a paper return. You will usually receive an email notification within 24 to 48 hours letting you know if the IRS has “Accepted” or “Rejected” your return. If it is rejected, don’t panic; the notification will include a code telling you exactly what to fix (usually a simple typo) so you can resubmit it immediately.

Step 6: Tracking Your Refund

After you successfully file your own taxes for the first time, the final step is the most rewarding: tracking your refund. For most taxpayers who choose electronic filing and direct deposit, the IRS issues refunds in less than 21 days. However, the exact timing can vary based on the complexity of your return and how early in the season you filed.

To keep tabs on your money, you can use the official IRS “Where’s My Refund?” tool. You can typically begin checking your status within 24 hours of e-filing. To use the tracker, you will need to provide three specific pieces of information:

  • Your Social Security Number or ITIN.

  • Your filing status (e.g., Single, Married Filing Jointly).

  • The exact whole dollar amount of your refund as shown on your tax return.

The tracker will move through three phases: Return Received, Refund Approved, and Refund Sent. If you prefer to track your status on the go, the IRS2Go mobile app offers the same tracking features directly on your smartphone.

It is important to note that certain factors can cause a delay when you file your own taxes. For example, if you claimed the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit, the law requires the IRS to hold those refunds until mid-February to verify eligibility and prevent fraud. If your refund is taking longer than expected, you can consult the IRS Refund FAQ for a list of common reasons for delays, such as manual reviews or errors in bank account numbers.

Conclusion: Empowering Your Financial Future

Successfully learning to file your own taxes for the first time is more than just a seasonal chore; it is a foundational step in managing your adult life. By taking the time to understand your income, deductions, and credits, you are ensuring that you keep as much of your money as possible while staying in good standing with the government. Remember that the tax deadline is typically April 15, and while you can request an extension to file your paperwork, any taxes you owe are still due by that date.

Now that you have the roadmap, you can approach tax season with confidence rather than dread. For more personalized tools, the IRS Interactive Tax Assistant is always available to answer specific questions based on your unique financial situation.

Frequently Asked Questions (FAQ)

A: Don’t panic. If the IRS hasn’t processed your return yet, they may catch and fix simple math errors for you. If you need to fix a major error, such as a missing W-2 or a forgotten credit, you can file an amended return using Form 1040-X. Many tax software programs make this process easy to do electronically.

A: You should still file your return by the deadline to avoid the "failure to file" penalty, which is much higher than the "failure to pay" penalty. The IRS offers several payment plan options that allow you to pay off your balance over time. If this is your first time dealing with a penalty, you may also qualify for First-Time Abate penalty relief.

A: Yes. All income is taxable, regardless of whether you receive a formal tax form like a 1099-K. If you earned more than $400 in profit from self-employment, you are required to report it and pay self-employment taxes to cover your Social Security and Medicare contributions.

A: Generally, the IRS recommends keeping your tax records for at least three years. This includes copies of the returns themselves, as well as W-2s, 1099s, and receipts for any deductions or credits you claimed.

A: An Identity Protection PIN (IP PIN) is a six-digit number that prevents someone else from filing a tax return using your Social Security number. While not required for everyone, it is a great security feature you can opt into through your IRS Online Account to protect against identity theft.

 

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