By Manson Tung - Sacramento Country Day School - NextGenVest Community Manager - Sacramento, CA
You got your first paycheck. Now what? Here are the top 5 things you need to know about your taxes. When I received my first paycheck, I felt sheer exhilaration, but I was faced with a few questions. How do I report my earnings to the government? How will this help me in the future? Are there special forms I must use because I made my money overseas? To answer any questions you might have, here are the top 5 Do’s and Don’ts on filing your taxes:
Doing it on time or ahead of schedule will make your life easier and keep away the tax regulators. In addition, if there are questions you have about form, you’ll have the time to research it and make sure you are entering the correct information.
DO Choose The Right Form.
You will probably file a 1040EZ form which is suitable for those with no dependents (kids), make less than $1,500 in interest income, and make $100,000 or less a year. You can verify the form you will be filing with your employer if you have any questions for it.
DON'T Be Late.
Being late to dinner with your friends is bad, but being late for Uncle Sam can be criminal. Besides April 15, keep an eye out for June 16, September 15 and October 15, all major tax dates.
DO File Even If You Worked Overseas.
It can be just as necessary. Even if you get your paycheck in a foreign country, if your boss reported it, you better too! As long as you earned over $9,000, in addition to filling a 1040, you will have to file a 2555-ez form and a 1116.
Do Start A Retirement Account Now.
If you file your taxes, you can start saving money for your retirement. For example: if you start at 15 and invested $10,000 with a monthly addition of $100 at 8%, you will have $1.3 million by the time you are 65. Your total amount invested will only be $70,000, but the interest will be $1.26 million! Starting early literally makes you money.