Filing Taxes for the First Time? Here's What You Should Know

It's that time of year again—the ads for free tax filing software are popping up everywhere, and the deadline to file your taxes is quickly approaching. Whether you've just landed your first job and received your W-2, or you’ve started freelancing or running a side hustle and are now getting 1099 forms, filing taxes for the first time can feel overwhelming. But don’t stress—it’s a process that anyone can navigate with the right preparation. Here’s a guide to help you make sure you’re on track to file your taxes without any headaches.

Gather Your Documents

Before you start filing, you’ll need to gather all your tax documents. Whether you're employed full-time or running a side business, the IRS requires specific forms for you to report your income.

• If you’re employed by a company, you should receive a W-2 form from your employer that details your total earnings and how much tax has been withheld.

• If you’re self-employed or earn income from side gigs, expect 1099 forms from clients who paid you $600 or more.

• Don’t forget to keep track of receipts for any business-related expenses if you’re freelancing, like office supplies, transportation, or business travel.

You’ll also want to hold onto any canceled checks, receipts, or other documents that can back up the information you’re putting on your tax return. These can come in handy if the IRS needs more details or if you get audited.

Understand Your Filing Status

Your filing status plays a big role in how much you pay in taxes, so it's important to determine it correctly.

• If you’re living independently and supporting yourself, you'll likely be filing as "single." However, if your parents claim you as a dependent, it could affect your tax situation.

• If your parents claim you as a dependent, they might receive a larger tax deduction, but you may also be able to claim the standard deduction yourself, which would lower your taxable income.

• It's important to have an open conversation with your parents to make sure you’re both clear on your filing status and that you're not both claiming the same deductions.

Track Your Expenses (Especially for Freelancers)

If you have a side hustle or are self-employed, one of the biggest advantages is that you can deduct business expenses from your taxable income. However, you need to keep track of those expenses to make sure you're taking full advantage of this.

For example, if you’re driving for a rideshare company or doing freelance work, you can deduct mileage, office supplies, and even software subscriptions you use for your business. But here’s the catch: you need to keep your business expenses separate from your personal ones.

The easiest way to do this is by using a separate business bank account and obtaining an Employer Identification Number (EIN) from the IRS. You can also take advantage of apps that help track your expenses and mileage automatically. This will also make things easier for you if you ever get audited, as it’s much harder to argue with neat and organized records.

Don’t Forget About Investment Income

First-time filers often overlook income from investments like stocks, bonds, or cryptocurrency. Even if you didn’t sell any investments during the year, the IRS still requires you to report any gains or losses from those assets.

If you’ve made any investment-related income, you'll need to report it on your tax return. This applies to stocks, bonds, or even cryptocurrency. Yes, even if you haven’t sold your crypto, it needs to be reported. While the IRS can be tricky with these investments, tax professionals can help you sort through the details and avoid mistakes.

Consider a Tax Preparer

If your tax situation is simple—like only having a W-2 from a job—then free filing software might work just fine for you. But if you’ve got a more complicated situation, such as freelance work, side gigs, or investment income, a tax professional can help ensure everything is filed correctly.

A good tax preparer can save you from making costly mistakes and ensure you're taking advantage of every deduction available to you. 

Extensions and Corrections

Life can get busy, and sometimes you might need more time to file your taxes. If that’s the case, you can file for an extension, which gives you until October 15 to submit your return. However, you still need to pay what you owe by the April deadline—filing an extension doesn’t delay your payment deadline.

If you’ve already filed and later realized you made a mistake, don’t panic! You can always file an amended return to correct any errors. The IRS allows you to amend your tax return within three years of the original filing date, so if you realize you forgot to report some income or missed a deduction, it’s not too late to fix it.

Go with Nuve

Filing taxes for the first time doesn’t have to be a stressful experience. With a little preparation and the right resources, you can tackle it like a pro. Make sure to gather all your necessary documents, track your business expenses, and don’t forget about any investment income. If things feel complicated, reach out to a tax professional who can guide you through the process. Most importantly, take your time, and stay organized, and you’ll have your taxes filed in no time.

At Nuve, we understand how overwhelming taxes can be, especially if it’s your first time filing. That’s why we’re here to help make the process as easy as possible. Whether you need a helping hand or want advice on tax strategy for your small business, our team is ready to support you. Reach out to us today to learn more about our tax services, which are designed for young professionals and entrepreneurs like you. We’ve got your back, so you can focus on what really matters—growing your career or business with confidence.

Disclosure Statement:

The information provided in this blog is intended for general guidance and educational purposes only. It is not a substitute for personalized professional advice. Every individual's financial situation is unique; therefore, you should review your specific needs and consult with qualified professionals, such as certified public accountants or tax advisors, before making any decisions. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or currency of the content. By using this blog, you acknowledge that you have read and understand this disclaimer, and you agree to use the information responsibly, in conjunction with advice from qualified professionals, to make informed financial decisions.