Did you just get your first full-time job this year? Or maybe you just graduated college and have your first Adult Job now.
First, congratulations! Second, it’s never too soon to start planning for taxes. Yep. Welcome to adulthood.
If you haven’t worked full-time before, or only have worked part-time, minimum wage-type jobs, you probably haven't had to worry about paying taxes.
If you made less than $13,850 last year, you may not have filed at all.
But once you have income, you’re going to pay taxes on it. In this article, we’re going to walk through some of the basics of tax planning and filing. Don’t worry; you got this.
What are income tax payments?
Tax payments are amounts of money you pay to the federal government as a citizen of your country, in this case the United States.
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The IRS, or Internal Revenue Service, administers the country’s taxation. Most states in the US also have a state income tax in addition to the federal income tax.
If you work for an employer, most of your tax payments are deducted from your paycheck before you receive it, and you never see that money.
However, if you are self-employed (including side hustle income), you have the responsibility to set aside money from your earnings to meet your tax liability every year.
How to file taxes on time
The standard deadline for filing your income tax return in the United States is April 15 of the year after the tax year. So, for example, you would file the tax return for your 2023 earnings on or before April 15, 2024.
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If you need more time to prepare your taxes, you can file an extension, which gives you until October 15 to file your return.
However, this does not mean that you get an extension to pay. If you believe that you will owe money on your taxes, you must pay an estimated amount as part of the filing extension.
If you do not file your taxes on time, you will owe a Failure to File penalty of 5% per month of the amount of tax due, up to 25% of the amount of tax you owe.
What paperwork do I need to file my taxes?
The basic paperwork you will need is your W-2 form from your employer and a 1099 form from anyone for whom you did contract work or earned more than $600 in other income.
You may also need documentation for any extra deductions or tax credits you may be claiming. If you have a spouse or children that you are claiming as dependents on your tax return, you will need social security numbers for each person.
All of the information from your return gets entered into IRS Form 1040 – Individual Taxation.
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