How should you do your taxes? If you’ve just finished college or graduate school, this may be the first time you do taxes without being claimed as a dependent on your parents’ tax return. There may have been a few changes in your life that can offer deductions. The good news is that there are several options for preparing your taxes. You can choose how involved you are in the process and whether you want or need to get help from a professional tax preparer. Tax time doesn’t have to be stressful, and it isn’t all that confusing.
The first step in doing your taxes is to gather all your paperwork. This includes any W-2 forms from employers, 1099 forms from employers who did not take taxes out of your pay, and any interest earnings reported from investments or other bank accounts. You’ll also want records of any interest paid to those hefty student loans you’ve racked up.
Going to a website that offers free tax preparation software is a great place to start. You can find those websites listed on the IRS site. They offer a list of all free e-file preparers. Most of these sites walk you through the process, telling you which box to enter on which line. They also do the math for you, so you can give your hard-earned college math skills a rest.
First of all, determine if you can be claimed as a dependent. While they may not be paying for your visits to happy hour, they may be able to claim you as a dependent on their tax return. If you are married and filing jointly, you cannot be claimed as a dependent. The IRS states that you must live with your parents for more than half the year, but being away at college counts as living with your parents. You must have been a full time student for any part of five months of the year. Also, you cannot have provided more than half of your support for the year. If you have received a loan, that counts as your income and the support you have provided for yourself. Clear as mud? Again, many tax sites will be able to ask you the questions to clear up whether or not you can be claimed as a dependent. Also, the IRS website has a lot of information to answer questions.
