📋 Understanding Taxes
As you start earning income, you'll need to file tax returns. The U.S. uses a progressive tax system where higher earners pay higher rates. Key concepts include gross income, deductions, credits, and your tax bracket. Filing correctly can save you money and avoid penalties!
- •W-2 forms: From employers, show wages and taxes withheld
- •1099 forms: For freelance/contract work
- •Standard deduction: Reduces taxable income (no itemizing needed)
- •Tax credits: Directly reduce your tax bill (better than deductions)
💰 Maximizing Your Refund
File on time (usually April 15), claim all eligible credits like the Earned Income Tax Credit or education credits, and consider contributing to retirement accounts to reduce taxable income. Keep receipts for deductible expenses. Free tax software is available for simple returns!
- •File by the deadline to avoid penalties
- •Use free tax software if your return is simple
- •Contribute to IRAs before tax deadline for prior year
- •Keep tax documents organized for 7 years
- •Consider consulting a tax professional for complex situations