A Crash Course to Filing Your Taxes

March 14, 2017

If you’re you new to this whole ‘filing your taxes thing’, you must have a bunch of questions. Find out what you need to know to do everything on time and stress-free. 

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This year you should file your Income Tax Return by April 18. If you’re not even sure if you have to file or not, the answer is easy:

You have to file if:

-You live in or outside of Puerto Rico, are single or married, and earned more than $5,000 from sources in Puerto Rico during the previous tax year (January 1 to December 31).
-You’re married, decided to file separately, and earn $2,500 or more

 

What You Need to File Your Taxes

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    • Your Social Security number and date of birth (also your spouse’s and your dependents’)
    • Form W-2 (Form 499R-2/W-2 PR, provided by your employer) or Form 480.6A or 480.6B (if you work through professional services)
    • Proof of interests you’ve paid, like for mortgages or student loans
    • A check from your bank account that has your bank’s routing number and your account number, if you want Hacienda (the Treasury) to direct deposit your refund

Are you between the ages of 18 and 26? Relax, if you earn less than $40,000, you don’t pay ANYTHING.

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Remember these tips:

  • The Secretary of Hacienda reminds you that, according to the Young Entrepreneurs Incentive and Financing Act, every resident of Puerto Rico between the ages of 16 and 26 can benefit from an exemption that applies to “the first $40,000 of gross income earned by a youth on account of wages, rendered services, and/or self-employment” during the fiscal year. Check that your W-2 shows your reported income in the right box (16 code E) and that the $40,000 exemption provided by this law is also included.
  • If you’re in your first four years of college and working towards a bachelor’s degree (even if you’re working), you can take advantage of the American Opportunity Tax Credit. You can claim it even if your income is $0. “Under federal law 112-240, taxpayers who are in college get a credit of up to $1,000 in qualified school expenses,” says Rodríguez, who encourages you to speak with a specialist to find out what documentation is required.

 

Even though it can look a little intimidating, the key is to get organized. Get started with plenty of time, check all the requirements to claim deductions and exemptions, and do all the research you need.

Visit our section Banking 101 for more information on how to manage your money and for advice on moving towards your independence.

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