Can someone explain how taxes work for a 20-year-old just starting adulting? 😃

Hi Jordan! Welcome to the wonderful world of adulting and taxes! Let me break this down for you in simple terms: What taxes are: Taxes are money collected by the government (federal, state, and sometimes local) from your income. This money funds public services like roads, schools, military, and social programs. On your paycheck: The money being withheld includes federal income tax, state income tax (in most states), Social Security tax, and Medicare tax. Your employer calculates an estimate of what you'll owe based on the W-4 form you filled out when hired. Tax season: This runs roughly from January to April 15th each year. This is when you "file" your taxes - basically telling the government how much you earned and calculating if you paid the right amount throughout the year. The big misconception: You DON'T get all that withheld money back. You only get back what you overpaid. If your employer withheld $2,000 but you only owed $1,500 in taxes, you'd get a $500 refund. Filing options: You can file for free using IRS Free File if your income is under about $73,000. There are also tax software options like TurboTax, H&R Block, or TaxAct that range from free to paid depending on how complicated your situation is. Don't worry - for a first job with simple income, filing taxes is actually pretty straightforward!

Hey, just wanted to share my experience as someone who was in your same position a few years ago. I was so confused about taxes until I found this amazing tool called taxr.ai (https://taxr.ai) that literally saved me when I was trying to figure out my first tax return. I was getting crazy anxious about filing correctly and potentially missing out on money I was owed. My parents were kinda useless with explaining it too. I uploaded my W-2 form (that's the tax document your employer gives you in January showing how much you earned and what was withheld) to taxr.ai and it explained everything in super simple terms. The tool basically analyzed my situation and explained which tax credits I qualified for as a young person with a first job. It even pointed out that I could claim education credits since I was taking some community college classes. Ended up getting back way more than I expected!

Alright, I need to follow up about that taxr.ai site that I was skeptical about. I decided to give it a try after doing some research, and honestly, it was way more helpful than I expected. I uploaded my W-2 and some documents from my side gig, and it broke down everything in a way that actually made sense. The explanation about tax brackets was super clear - I always thought if I made more money, I might end up with less take-home pay because of jumping to a higher tax bracket (which is completely wrong). It pointed out a deduction related to my freelance work that I had no idea about. Would have completely missed that money. The security seemed solid too - they don't keep your documents and everything is encrypted. Just wanted to share since it actually helped me understand what I'm doing for the first time.

I see you're getting some good advice here, but I wanted to share something that literally saved my sanity last tax season. After waiting on hold with the IRS for HOURS trying to ask questions about my refund (it was delayed for weeks with no explanation), I found this service called Claimyr (https://claimyr.com). They somehow get you connected to an actual human at the IRS without the ridiculous wait times. I was super skeptical that this would actually work, but you can check out their demo video here: https://youtu.be/_kiP6q8DX5c I was able to talk to a real IRS agent in like 20 minutes instead of spending my entire day on hold. The agent explained that there was a small error on my return that was causing the delay, and I was able to get it fixed right away. My refund showed up a week later. For a first-time filer like you, being able to actually ask the IRS questions directly might be super helpful!

I need to eat my words about that Claimyr service. After my skeptical comment, I ended up in a nightmare situation with the IRS claiming I owed back taxes from a W-2 job I had in college (I didn't). Spent THREE DAYS trying to get through to someone at the IRS with no luck. Out of desperation, I tried the Claimyr service, fully expecting to come back here and report it was a scam. But damn, it actually worked exactly as advertised. Got connected to an IRS agent in about 30 minutes. The agent confirmed there was a reporting error and helped me resolve the whole thing. Apparently the service just automates the hold process, which makes complete sense - they're not actually "skipping lines" like I incorrectly assumed. For anyone dealing with tax issues where you actually need to speak to someone at the IRS, this is legitimately worth it. Consider me surprised and corrected.

Some basic stuff that helped me when I first started (I'm 23 now): 1) Your W-2 form is super important - you'll get it from your job in January. Don't lose it! 2) Tax brackets are MARGINAL - only the money above each threshold gets taxed at the higher rate. Like if the 12% bracket starts at $10,000, only the dollars ABOVE $10,000 get taxed at 12%. The first $10k is taxed at the lower rate. 3) If you make under like $12,950 (standard deduction for 2022), you might not owe ANY federal income tax! 4) The IRS website has a Free File program that lets you file for free if you earn under $73,000. 5) Even if you don't owe taxes, you should still file - you might get money back from tax credits. 6) Social Security and Medicare taxes (FICA) are different from income tax - you generally don't get those back. Hope that helps! Wish someone had told me all this when I started working.

One thing nobody's mentioned - keep track of ALL YOUR EXPENSES that might be tax-related! I learned this the hard way. If you're a regular W-2 employee (like at a store or restaurant) it's pretty simple, but if you do ANY side work or freelancing, keep receipts for EVERYTHING related to that work. Apps, supplies, mileage, part of your phone bill, internet, etc. Also, if you're in school, keep records of tuition and books! There are education credits that can save you $$.

When I was 20 I thought getting a big tax refund was awesome... until my econ professor explained I was just giving the govt an interest-free loan all year lol. If u get a huge refund, consider adjusting ur W-4 withholding so u get more $$ in each paycheck instead of waiting for a refund. Its YOUR money!