Filing taxes for the first time can be daunting. Whether individuals plan to file taxes through a service or on their own, there are important things to remember before filing a tax return. Portia Johnson, an Alabama Cooperative Extension System specialist, has tips for first-time filers, as well as seasoned filers.

Understand When Tax Filing is Necessary

Johnson, a financial resource management specialist, said some taxpayers think they don’t have to file taxes if they don’t make a lot of money.

“Although some people are exempt from taxes, this only happens occasionally,” she said. “If you are under 65 and make more than $12,950 for single filers or $25,900 for married filers, you must file a tax return for 2022.”

Johnson said because tax credits can lower the amount of tax owed or increase the amount of a tax refund, filers may get a refund even if they don't owe any money for taxes. Individuals who qualify for those tax credits must file in order to receive a refund.

Prepare to File Federal Taxes

When preparing to file federal taxes with the Internal Revenue Service (IRS), Johnson said there are a few things to do prior to filing.

Gather tax documents. It is wise to collect tax-related items and information throughout the year to prepare for tax season.

Store documents safely and securely. It is important to keep tax documents in case you are audited by the IRS.

Compare tax preparation options. Before filing taxes, it is good to have an idea of all of the options to successfully file.

“Doing these things helps to save time when completing the forms and helps safeguard against omitting information or making filing errors,” she said.

File on Time

For most Americans the deadline to file 2022 federal income taxes with the IRS is Tuesday, April 18. The earliest taxpayers could begin submissions was Jan. 23—the official start of 2023 tax filing season.

“Generally, the best time to file taxes is as soon as you have gathered all of the tax documents,” Johnson said. “Filing early can also save taxpayers money since many commercial tax preparers run promotional pricing in late December and early January to attract new or repeat clients.”

Taxpayers who file after April 18 may be assessed a late fee of up to 5% per month up to 25% of a tax amount owed.

Johnson said it is best to file a tax extension if delays are expected. Extension requests must be filed by April 18. This gives taxpayers until Oct. 16 to file tax returns.

“It is important to note that an extension does not automatically prevent late penalties for taxes unpaid as of April 18,” she said.

Choose How to File

Many people decide to file their own taxes, while others do not have interest in completing their own. Johnson said tax filers may consider hiring a professional if they fall into one or multiple of the following areas:

• Own a business
• Plan to itemize deductions
• Have other complex tax situations–including extensive investments, multiple properties or other assets–or perform gig or contract work
• For taxpayers that want to file their own taxes, you will want to have a comfort with financial forms. Also, you need to allow at least five to seven hours of time to prepare and file taxes for simple taxes or up to 20 hours for a more complex tax situation.

First-Time Filers Double Check Dependent

Taxpayers who are filing for the first time can do several things to make the process smoother. Gathering documents in advance and comparing filing options are important. However, first-time filers can also do the following:

• Double check that no one else is filing you as a dependent on their return. This is especially important for young adults.
• Seek out tax deductions or tax credits for which you may be eligible.

More Information

An additional resource for taxpayers is the 2023 WISE Money Management calendar. This calendar includes a list of documents to keep on hand for tax filing as well as a record-keeping log, available at www.aces.edu. Taxpayers can also contact their county extension office to connect with a human sciences agent.