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First job? Here's what you need to know about filing your federal taxes

Submitting your 2021 tax return to the IRS won't feel so intimidating if you know the basics.

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Sarah Tew/CNET

Receiving your first paycheck is a liberating experience, but it's also a big step into the world of financial responsibility. You also might be surprised to see your first paycheck isn't as much as you expected, due to federal, Social Security, state and other local taxes.

Some of us don't think about our tax withholdings until tax season rolls around in late winter or spring. With the April 18th IRS tax deadline a few months away, it's the perfect time to review the tax filing process. Here are some useful things to know before you file your taxes for the first time.

1. Your W-4 determines how much is withheld in taxes

The amount of money your employer withholds from each paycheck is determined by the information you provided them on your W-4 form, the employer's withholding certificate, at the beginning of your employment. The W-4 determines your withholding based on your filing status (single/married filing separately, married filing jointly or head of household), whether you have multiple jobs or a working spouse, if you have children or other dependents and other adjustments (additional income, deductions or extra withholdings). 

If you're an independent contractor or gig worker, you may have received a W-9 form, or a Request for Taxpayer Identification Number and Certification) from your employer or client. In some cases, you may not receive any tax documentation, but you're still responsible for reporting any income earned and should pay estimated taxes to avoid an IRS penalty.

Read moreEstimated taxes for 2022: What they are, who needs to pay them and when they're due

2. Your employer will send you end-of-year tax documents (in most cases)

If you have a job where taxes are withheld, you can expect to receive a W-2 from your employer, typically in January. This tax form serves as a record of the income you received throughout the year and the amount of money withheld for federal, state, local and other taxes. 

For freelancers, gig workers or the self-employed, you should receive a 1099 or 1099-MISC from multiple employers. Even if you do not receive a tax form, it's your responsibility to report any earnings over $400 to the IRS.

Along with those forms, you'll need the following to file your taxes:

  • Your Social Security or tax ID number
  • Other earning and interest statements
  • Retirement amount contributions
  • Charitable donations 
  • Educational expenses
  • Unreimbursed medical bills
  • Property taxes
  • Last year's federal and state tax returns (if applicable)

3. You may be eligible for deductions

You may be able to maximize your tax return by claiming eligible deductions and credits. Deductions and credits allow you to lower your tax bill or increase your refund. 

If you have private student loans and paid interest on them in 2021, you can apply for a student loan interest deduction, as long as you don't exceed the income thresholds. However, given the moratorium on student loans and interest freeze until May of this year, many students won't be eligible.

Another possibility is that  you were eligible for all or some of the third stimulus check, but you received the wrong amount or that money never arrived. You can claim your missing money on your 2021 tax return as a Recovery Rebate Credit. `

Read moreDon't overlook these 13 tax deductions and credits in 2022

4. Not everyone receives a tax refund

Even if this is your first time filing your taxes, you've probably heard of a tax refund, which is issued when you've paid more taxes during the tax year than you actually owed. Most Americans receive a refund (for the 2020 tax year, this amounted to 125.3 million refunds issued, for an average of $2,827 per refund), but in some cases you may not.

Those who underpaid in taxes usually do not receive a refund and will be charged an underpayment penalty by the IRS. Underwithholding can occur if you are self-employed or have nontaxed income (that you did not pay estimated taxes on), if you received year-end bonuses or stock dividends, if you made a profit from property sales or if too little was withheld on your W-4. 

In addition, if you don't file a tax return before the deadline, you may have to pay the IRS increasing interest on the taxes owed, as well as a late-filing penalty. 

5. Tax returns are due Apr. 18, 2022, but you should file sooner

Taxes are typically due on April 15, but this year the due date falls on April 18, 2022. That said, filing your tax return sooner is the safest bet. The IRS announced in a briefing in early January that this tax season is also expected to be challenging. (Last year millions of refunds were delayed for months.) The IRS also noted that filing electronically and setting up direct deposit is the best way to ensure you receive your refund fast.

If there are no errors detected with your tax return, you could receive your return in 21 days when filing electronically. However, if the IRS's system detects a possible mistake or error, this could significantly delay the time it takes to issue your tax return. The pandemic and shortage of IRS agents could also impact this timeline.

6. You have options for filing your taxes

Though can file your taxes by hand using IRS form 1040 and mail it to your state tax offices, the IRS is encouraging taxpayers to file electronically. You can find all relevant forms and instructions online at IRS.gov. Filing by hand can be a tedious process that places the stress of potential mistakes on your shoulders. Another option is to hire a professional tax preparer who will help you prepare and file your taxes through the mail. 

Over 90% of Americans file their tax returns with online tax software. If you've just started your first job and your tax situation is relatively simple (or if you make below $72,000 a year), there are many free programs online, including IRS Free File, where you can complete and submit your returns at no charge. If your income is above $72,000, if you want to claim deductions or if your tax situation is more complicated, there is plenty of other tax software that's both efficient and reasonably priced, and many offer access to live tax professionals who can walk you through the process. 

7. You may have to file state taxes

Depending on where you live, you may have to file state taxes. Many states have their own (usually free) online tax platforms. You can also use TurboTax, H&R Block and other online tax tools to file your state returns; they can import most of the information from a federal return they've already prepared, though they usually charge a fee. Check out CNET's comparison of tax software and services to see which is best for you.

Your state tax return deadline is likely the same as the federal return deadline: April 18. Notably there are seven states —  Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming — that do not impose an income tax. So, if you live in one of these states, you are not required to file a state tax return.