A Guide to Paying Your First Taxes (Part Two)

In Part One, I discussed a few basic questions related to paying taxes. Here are a few more issues that young people often face:

Where can I go for tax assistance if I need help?

For people who make below $50,000, there are a few options available. One that I definitely recommend is taking advantage of free tax preparation software, which I will be discussing in the next post. You are also able to get free tax-preparation advice on top of that software, as outlined on the IRS’s website here.

Many local areas also have specific programs where volunteers can help low-income people such as teens. If you are still in school, you should consider reaching out to your Dean of Student Life and seeing what they suggest.

What does it mean to be audited?

An audit is when the IRS contacts you in some form and requests to follow up on verifying your tax information. A certain amount of the population is randomly audited each year, in addition to people who are audited for having suspicious-looking tax returns. Some of these suspicions are things like numbers not adding up properly; information that you’ve submitted not matching information that other people have submitted about you; and claiming an unusual amount of tax deductions/write-offs for someone at your income level (for example, earning $12,000 and claiming to have donated all of it to charity without submitting documentation to the IRS).

IRS audits have varying degrees of intensity. Some of the time you will simply get a letter from them asking for information, which is known as a correspondence audit. Other times, they will request for you to meet in-person with an IRS agent—these meetings are typically more serious. An audit will often require you to have information pertaining to your last four or so tax returns, in addition to any receipts or documentation that you need for deductions on those returns.

Some of the time, the IRS will request access to materials such as your bank account, but that request really depends on the specific circumstances. There is, unfortunately, no hard and fast rule to audits. In the case of any audit, however, it probably makes sense to seek professional help, either from a tax-planner or from a trusted adult; you should not try to handle the audit entirely on your own.

Why is my paycheck for less money than I thought it would be?

When you receive a paycheck from an employer, you will likely find that a certain amount of the check has been withheld from you. This withholding helps to cover payments for social programs such as Medicare and Social Security. Depending on whether you have illegally evaded taxes in the past, you might also have additional amounts of the paycheck withheld in anticipation of what you will eventually owe in taxes. Although this tax withholding can be frustrating, the social programs will hopefully come to benefit you one day; it is all part of a cycle.

My question wasn’t discussed here. Where can I get more information?

I encourage you to comment at the end of the article and start a conversation about the question. That way, the resource will be there in the future if other readers have the same question. Additionally, you can check out the IRS’s tax site for students here to get a better handle on any questions.