Filing taxes for the first time feels overwhelming. But once you understand what's happening, it's actually straightforward. Let's walk through it step by step.
"I put off filing for years because I was scared I'd mess up. When I finally did it, I finished in under an hour and got a $1,200 refund. I'd been leaving money on the table!"
What Are Taxes, Really?
Throughout the year, your employer withholds money from each paycheck and sends it to the IRS. Filing a is just settling up:
| Situation | Result |
|---|---|
| They withheld too much | You get a |
| They withheld too little | You owe money |
| They withheld just right | You break even |
That's it. You're not calculating taxes from scratch—you're reconciling what was already paid.
What You'll Need
Gather these documents before starting:
Income Documents
| Document | What It Shows |
|---|---|
| Wages from employer(s) | |
| -NEC | Freelance/contract income |
| 1099-INT | Bank interest earned |
| 1099-DIV | Investment dividends |
| 1099-G | Unemployment benefits |
Pro Tip
Most of these arrive by late January. Check your mail and email—many are sent electronically now.
Personal Information
- Social Security Number
- Last year's tax return (if you filed)
- Bank account info (for direct deposit refund)
Possible Deduction Documents
- 1098 ( interest)
- 1098-T (tuition payments)
- 1098-E (student loan interest)
- Charitable donation receipts
Choosing How to File
Free Options (For Most People)
| Option | Best For |
|---|---|
| IRS Free File | Income under ~$84,000 |
| Cash App Taxes | Simple returns, any income |
| IRS Direct File | Available in some states |
| VITA (Volunteer) | In-person help, income under $67,000 |
Paid Options
| Software | Cost | Best For |
|---|---|---|
| TurboTax | $0-200+ | Hand-holding, interview style |
| H&R Block | $0-180+ | Similar to TurboTax |
| FreeTaxUSA | $0-15 | Budget-friendly, capable |
| TaxAct | $0-150+ | Middle ground |
Watch Out
Don't overpay! If you have a simple job with no itemized deductions, free options work perfectly.
The Filing Process: Step by Step
Step 1: Enter Your Personal Info
- Name, address, SSN
- Filing status (probably "Single" if unmarried and no dependents)
Step 2: Enter Your Income
The software walks you through each form:
- Enter W-2 info (or import it automatically)
- Add any 1099s
- Report any other income
Step 3: Claim Deductions
You'll choose between:
(most people take this):
| Filing Status | 2024 Amount |
|---|---|
| Single | $14,600 |
| Married filing jointly | $29,200 |
| Head of household | $21,900 |
(only if they exceed standard):
- Mortgage interest
- State/local taxes (up to $10,000)
- Charitable donations
- Medical expenses (if very high)
Pro Tip
If you rent, don't have huge medical bills, and didn't donate thousands to charity, the almost always wins.
Step 4: Claim Credits
Tax credits directly reduce what you owe—very valuable!
| Credit | Who Qualifies |
|---|---|
| Earned Income Credit | Lower income workers |
| Saver's Credit | Retirement contributions, lower income |
| American Opportunity | College students |
| Lifetime Learning | Education expenses |
| Child | Parents |
Step 5: Review and File
- Double-check all numbers
- Sign electronically
- Choose direct deposit for fastest refund
Understanding Your Results
The software shows your final number:
If you get a refund:
- This means too much was withheld during the year
- Choose direct deposit—it's fastest (usually 2-3 weeks)
- Consider adjusting your so you get more in each paycheck
If you owe money:
- This means not enough was withheld
- You can pay electronically when you file
- If you can't pay in full, the IRS offers payment plans
- Adjust your W-4 to withhold more going forward
Common First-Timer Mistakes
Avoid This
Missing income — The IRS knows about all your 1099s. Report everything, even small amounts.
Avoid This
Wrong filing status — If you're single with no dependents, you're "Single." Don't guess.
Avoid This
Missing the deadline — April 15 (or next business day). File an extension if you need more time, but pay what you estimate you owe.
Avoid This
Not filing because you can't pay — File anyway! The penalty for not filing is much worse than not paying.
After You File
Keep Your Records
Store for at least 3 years:
- Copy of your return
- All W-2s and 1099s
- Receipts for deductions claimed
Check Your Refund Status
- IRS "Where's My Refund" tool
- Usually updates within 24 hours of e-filing
Plan for Next Year
- Adjust if you got a huge refund or owed a lot
- Start tracking expenses now
- Consider increasing retirement contributions (reduces taxable income)
When to Get Help
Consider professional help if:
- You're self-employed with significant income
- You have rental property
- You sold stocks, crypto, or property
- You have foreign income or accounts
- Your situation is genuinely complex
For most first-time filers with W-2 jobs? The free software handles it perfectly.
Going Further
Once you've mastered the basics, our Building and Wealth tiers cover:
Building tier:
- Tax Strategies for Side Hustlers — What changes when you have self-employment income
- Tax-Advantaged Accounts Overview — How and IRAs reduce your taxes
Wealth tier:
- Advanced Tax Planning — Strategies for optimizing your tax situation
- — Reducing taxes on investments
- Quarterly estimated taxes for higher earners
Quick Win
If you haven't filed yet, download your W-2 and set aside 30 minutes this week. Use a free filing option and just start—you can save and come back. Most people finish faster than they expect.