Filing Your First Tax Return as a US Resident

Welcome back to our US Taxation newsletter series! This week, we’re focusing on a significant milestone for many: filing your first tax return as a U.S. resident.

If you’re feeling overwhelmed, don’t worry! We’ll break it down step-by-step to make the process easier and less intimidating.

Why You Need to File a Tax Return

As a U.S. resident, you are required to file a federal income tax return if your gross income exceeds certain thresholds. For the tax year 2023, if you earned more than $13,850 as a single filer, you need to file a return. This requirement applies even if someone else can claim you as a dependent.

Step-by-Step Guide to Filing Your First Tax Return

1. Gather Your Tax Documents

Before you start filling out any forms, collect all necessary documents:

• W-2 Form: If you were employed, your employer will send this form by the end of January. It shows your earnings and how much tax was withheld.
• 1099 Forms: If you did freelance work or received other income (like interest or dividends), you may receive one or more 1099 forms.
• Receipts and Records: Keep track of any expenses that might be deductible, such as charitable donations or medical expenses.

2. Determine Your Filing Status

Your filing status affects your tax rates and deductions. The main statuses are:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household

Choose the one that best fits your situation.

3. Decide How You Will File

You have several options for filing your tax return:

• DIY Software: Many people find it convenient to use tax preparation software like TurboTax or H&R Block. These programs guide you through the process and help ensure you don’t miss any deductions.
• IRS Free File: If your adjusted gross income is below $79,000, consider using the IRS Free File program for free online tax preparation.
• Hire a Tax Professional: If your situation is complex or if you prefer personal assistance, hiring a certified public accountant (CPA) or an enrolled agent can be beneficial.

4. Fill Out Your Tax Return

The main form for individual taxpayers is Form 1040. Here’s what to do:

• Report your total income from W-2s and 1099s.
• Claim any deductions (like the standard deduction of $13,850 for single filers in 2023) or itemize if it benefits you more.
• Calculate your tax liability based on your taxable income.

5. File Your Return by the Deadline

The deadline for filing your federal tax return is typically April 15th of each year. If you need more time, you can file for an extension, which gives you until October 15th to submit your return. However, remember that an extension does not extend the time to pay any taxes owed.

6. Keep Records

After filing, keep copies of your tax return and all supporting documents for at least three years. This is important in case of audits or if you need to amend your return later.

Common Mistakes to Avoid

• Missing Deadlines: Always be aware of key dates to avoid penalties.
• Incorrect Information: Double-check Social Security numbers and other personal information for accuracy.
• Not Claiming Deductions/Credits: Research available deductions and credits that could lower your tax bill.

Conclusion

Filing your first tax return can feel daunting, but with the right preparation and resources, it can be a straightforward process. Take it step by step, gather all necessary documents, and don’t hesitate to seek help if needed.

In our next newsletter, we’ll explore deductions and credits that can help reduce your taxable income. If you have any questions about today’s topic or suggestions for future newsletters, feel free to reach out!

Happy filing!