Twenty five percent of Gen Zers say that they will need a therapist to deal with tax filing stress (Source) Taxes can stress out anyone at any age but, navigating the system for the first time can be particularly overwhelming. Additionally, fifty four percent said filing taxes has brought them to tears in the past or expect to this year (Source). There are a few ways to help avoid that, including working with a Certified Public Accountant. For starters, they’ll talk to you about some of these forms:
- Form W-2
The first form you will need is your W-2. This form shows how much money you have earned (wages) and how much tax your employer withheld from your paycheck in the previous year. You will receive a W-2 if you are a regular employee earning at least $600 that year. As an employee, the information provided in your W-2 form is important when preparing your tax return.
Employers usually send out their W-2s by January 31st. A copy will also be sent to the IRS. If you do not receive a W-2 by the end of February, contact your employer to confirm your mailing address and request a copy.
- Form 1099-INT
A 1099-INT is a tax form used to report interest income you have received throughout the year. If you earned $10 or more in interest from a bank, brokerage or other financial institution, you’ll receive a 1099-INT (Source). You may not receive this form every year, because in prior years it could have been under $10. If you are signed up for online banking, you can find this form within your banking app. Each bank might have a different location for this form so look up your organization to find where it is located. If you do not have an online banking account, you will receive your 1099-INT form in the mail.
- Form 1098 – T
If you are paying college tuition, the 1098-T form is crucial for determining which education-related tax credits you may qualify for. This document is used as a tuition statement that your school uses to report qualified tuition and related education expenses to you and the IRS. You or your parent/guardian may be able to claim these expenses as education related tax credits. Depending on your school, where this form is located, it will vary. Your school can direct you to where you can find this – it’ll likely be located inside your school portal.
This form does not allocate for student loans if you have them.
April 15th is Tax Day
The most important day of the year for taxes is April 15th, which is also known as Tax Day. You will want to file your federal individual income tax return before that date, ideally. However, life happens, and you can always file for an extension if you need to.