Taxes, But Make It Make Sense — Part 1

📋 Understanding Your Tax Forms

Welcome to the alphabet-and-number soup of adulthood. Think of these forms like receipts for the different ways you earned or spent money this year:

• W-2s → The classic combo meal.
  If you’re a regular employee, your job sends this to you. It shows how much you earned and how much was already withheld for taxes. The IRS gets a copy too—so, yeah, don’t try to fudge the numbers or “forget” about this one.

• 1099s → The à la carte order.
  Freelancers, side hustlers, or anyone paid outside of your run-of-the-mill paycheck, odds are you’ll receive one (or more) of these:

  • 1099-NEC  → For self-employment income

  • 1099-INT → For interest earned (like from a savings account)

  • And others, depending on how you made your money (hopefully not illegally)

• 1098-E → Your sad Spotify Wrapped—but for student loans.
  Shows student loan interest you have paid (can help you score a sweet, sweet deduction in your taxes)

• 1098-T → Your tuition receipt.
  If you paid for college or took courses, this form may help you claim an education tax credit.

✂️Standard vs. Itemized Deductions

In short, deductions lower your taxable income—so you may owe less.

• Standard deduction — The default setting.
  It’s a flat amount based on your filing status. Most people choose this route—it’s straightforward and efficient in most cases.

• Itemized deductions — The DIY route.
  Requires more time, but could save you more if you had major expenses like:

  • Major medical bills

  • Charitable donations (yes, even your Goodwill donation haul counts)

  • Business or home office expenses

Pro tip: If you’re not sure which one is better, most tax software will calculate both and pick the better deal for you.

Quick summary:
✅ Itemizing can save you serious money
❌ But it takes more effort

🏷️ Common Tax Credits & Deductions Worth Knowing

These tax breaks reduce what you owe or increase your refund:

• Earned Income Tax Credit (EITC): For low-to-moderate income earners. It can lead to a surprisingly large refund.

• Student Loan Interest Deduction: Deduct up to $2,500 if you paid interest on eligible student loans.

• American Opportunity Credit & Lifetime Learning Credit: For education-related expenses. If you paid for school, you might be eligible.

• Saver’s Credit: If you contributed to a retirement account while on a modest income, you could get rewarded for it through a tax break.

🗄️How To File (Without Getting Lost In The Sauce)

You’ve got a few options—choose your tax adventure:

• Tax software (TurboTax, H&R Block): 
  Beginner-friendly and walks you through the filing step-by-step, like your favorite navigation app.

• Hire a pro: 
  Great if you have a more complex situation (freelance job, multiple income streams, big life changes, etc.).

• Free filing:

  • IRS Free File if you make under a certain income threshold

  • TurboTax Free Edition (for simple returns & tax situations)

💬 The Bottom Line 👊