Before you start spiraling, though, some words of reassurance: “As a young person, it’s actually pretty easy,” especially if you’ve been checking in on your finances throughout the year, so you know what tax documents to expect, says Mary Beth Storjohann, a certified financial planner and founder of financial education and empowerment platform Workable Wealth. Even if you haven’t stayed on top of your finances as much as you would’ve liked, Storjohann says you still have options.
Ideally, you’d want to hire an accountant by the end of January, before they’re booked up, Storjohann says. Otherwise, she suggests asking your personal and professional networks for recommendations rather than wading through online search results.
If your situation isn’t that complicated, and you just want a pro to put you at ease, something like H&R Block — which allows walk-ins — would suffice.
That said, “self-filing platforms are getting better and better,” and some even offer free representation in case the IRS audits you, Maddox says. There’s no right answer. It all depends on your personal needs and comfort.
Whether you decide to use a self-filing service or work with a professional, you’ll need the same basic list of information, according to Storjohann.
Your name, date of birth, Social Security Number, and routing and bank account numbers. You’ll also need this info for your spouse, if you’re filing jointly, as well as the names, birthdates, and Social Security Numbers for any dependents.
You’re still responsible for reporting income from any companies that didn’t send you a 1099, Storjohann says. “If you didn’t get a 1099 from a company that you worked for, and they paid you $10,000, you still need to report that $10,000 on your taxes and pay what you owe on it,” she says.
Maddox agrees. “Make sure the amount [on the 1099] matches the income you tracked on your own,” she says. Creating separate checking and savings accounts for your business or side hustle will make income and expense tracking way easier, Storjohann says.
The 2021 standard deduction for single people and married people filing separately; for married people filing jointly, it's $25,100. Deductions lower your taxable income, Storjohann explains. Itemizing deductions for certain expenses can work in your favor if they exceed the standard deduction, Storjohann says, so that you pay less taxes than you would if you’d claimed it. You’ll most likely benefit more from claiming the standard deduction.
You don’t need to be a tax expert to file your taxes. Nowadays, many self-filing services are really intuitive and user-friendly, Storjohann says. But if you need a human to walk you through the process or just offer some reassurance, you can always call an accountant. Filing your taxes may seem like a Scary Adulting Task, but it doesn’t have to be.