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MVCU, taxes, file taxes
Home / Tools / Taxes for Dummies
Taxes for Dummies on 8/29/2022

Taxes for Dummies

Think Pink

I saw a Tweet the other day that made me laugh:

Tweet

The painful truth for most people my age- we have no clue how to file taxes. And what do you do when you have no clue how to do something? Ask your parents!

It was always a vicious cycle each tax season: I’d receive my W-2, pass it along to my dad who then brought it to a CPA and in the end I was charged a bill of $140.00. I didn’t want to pay that much but it was all I ever knew and the convenience of having it done for me was too hard to say “no” to. Besides, I never filed on my own so I had no clue how cheap and easy it really could be!

My dad strongly suggested that this year I take that next step and file my taxes on my own. Truthfully, I was terrified going into it. I feared making a mistake when filling and then having the IRS come after me.

I reached out to my work’s VP of Finance about the uncertainties I had but was reassured that I still had the basic tax qualifiers (I claimed 0, had student loans, and only received one form of income) so it would be a painless process.

I heard great reviews about TurboTax so I bit the bullet and created an account. I was extremely impressed with how easy it was. TurboTax explained each step thoroughly, clearly labeled in which boxes I could find the necessary information, and if I needed more help they had live CPA’s readily available. I didn’t need to use a CPA but it was good to know the option was there.

I am not kidding when I say that in less than 45 minutes I was able to file my taxes. I also filed for $60.00 less than my previous CPA (it would have been $100.00 but I got suckered into TurboTax’s Deluxe Version)!

I could successfully cross this task off on my list of “adult to-dos.”

Here’s what I learned from filing my taxes on my own:

  1. Have all of your paperwork ready beforehand
    Some items (but not all) that you will need are your social security numbers, W-2, 1099 Forms, educational expenses, charitable donations, and property taxes, etc. I had my 1099 form and my W-2’s which were easily downloaded to TurboTax from ADP.

    Something that I didn’t know I needed beforehand was my Health Insurance Card because I am still on my mom’s health insurance. When it came to the health insurance portion, I was a little confused at first but all I had to do was plug in my Member Number ID and I was done!

    I also didn’t know that I needed my last year’s taxes. Essentially, the IRS requires your AGI (adjusted gross income) from your previous taxes to verify your identity. To fully complete filing my taxes, I just had to plug in a few different numbers that were on last year’s form 1040 and I was good to go!
  2. Know the rules for claiming a dependent or being claimed a dependent
    It may sound obvious but I figured that because I was on my mom’s health insurance than she must claim me as dependent. I was frustrated during the application because I wasn’t qualified to receive my student loan interest. I didn’t understand why until I realized that I wrote down that my mom claimed me as dependent which means she would receive the amount back from my student loans not me.

    To be claimed dependent, a qualifying child must answer “yes” to all of the following questions:
    • Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, adopted child or an offspring of any of them.
    • Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
    • Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
    • Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
    • Are you the only person claiming them? This requirement commonly applies to children of divorced parents.
    I checked off the first question but did not meet the age requirement nor does my mom financially support me.
  3. Decide if filing on your own works best or if you’re going to hire a pro
    As mentioned, my taxes were pretty basic this year. All of my income had come from my current employer and I had nothing financially complicated going on, so for me, it was real easy! In the future, if I get married, have kids, or buy a home or have a business/side-hustle and want help with a strategic tax plan, then I might consider going back to a CPA.
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Category: Think Pink: A Millennial Perspective



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