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Taxes are required payments people make to the government on a federal, state, and/or local level. When people talk about “filing taxes,” they’re typically referring to sending details about the previous year’s tax-related information to the government, including their income, expenses, and deductions. Most people are required to send their financial information in a tax return. The US tax season typically takes place between January 1 and April 15. On average, the IRS processes more than 240 million federal tax returns each year. Due of the large number of returns being processed, it’s often recommended to seek professional tax advice and to use the best tax software to make sure your taxes are filed correctly. Otherwise, mistakes could result in a lengthy process of submitting amended documents to make any necessary corrections.
High school and some college students may not have to file their own taxes if they’re claimed as dependents by their parents and don’t earn over a certain amount of annual income from part-time jobs. This is typically the case if a student has W-2 employment, what you would consider a standard job with regular paychecks. Although, a student might consider filing a tax return anyway if income was withheld by their employer because they could receive that money back.
Even if it seems like you don’t have to worry about them for a while, it’s best to understand as much as you can about taxes now because you’ll eventually have to file your own, and it’s good preparation for understanding your finances down the road. The earlier you start learning about taxes, the less daunting they’ll seem later.
Need more help with financial planning? Check out our blog 5 Tips to Help College Students Manage Their Finances.