How to Do Your Taxes: 4 Tips for First Year Associates
It's not polite to talk about money, but we'll do it anyway.
You're working at BigLaw, which means one thing: you're making big bucks. As a first-year associate, this is probably the first time you're making a salary in the six-figures. But as you've already noticed, a big chunk of that gets taken out of taxes. Big bucks equal a higher tax bracket.
If this is your first time you are filing taxes as an associate at BigLaw (or MidLaw, or even a strong boutique firm -- we're equal opportunity here), here are some tips to get you through it. Because you're in the big leagues now. Luckily, lawyers are among the most honest when it comes to filing our taxes -- and we aim to keep it that way.
1. Hire Someone
Look, you're busy billing over 2,000 hours per year. Do you really have time for TurboTax? Do yourself a favor and hire someone to do your taxes. We're guessing you went to law school because you weren't great at math -- don't try to prove yourself now.
2. Get Organized
Even if you hire someone to do your taxes it's in your best interest to get organized. Your CPA is not a mind reader -- you'll need to provide her with documentation so she can do your taxes. She'll probably charge you less if you hand her your receipts and forms in a folder, rather than a plastic bag.
3. Know Your Deductions
Do you own a home? Have dependents? Does your couch qualify as a home office when you work on weekends? Paying off student loans (with interest)? These are just some of the things that may qualify as deductions (um, not the couch part), so be prepared to discuss the deductions available to you with your tax preparer.
4. Make Charitable Contributions
Ok, so if you want to take advantage of the charitable contribution deduction for the tax year ending December 31, 2013, your contributions had to be made by then. If you took our end-of-year advice, you were smart and made a donation to your favorite charity before year-end. If you were not, you know better and will begin making contributions immediately, so you'll have something to deduct for your 2014 taxes.
Tax season is crazy and your accountant will be much happier, and your life much easier, if you start preparing for tax filings now. By the end of January, you should have all the documentation you need to hand off to your accountant. By using that as a deadline, and following our four tips, come April 14th you won't be running around like a chicken without a head.
Editor's Note, February 21, 2017: This article was first published in January, 2014. It has since been updated.
- 5 Ways to Survive Document Review (Without Killing Yourself) (FindLaw's Greedy Associates Blog)
- BigLaw 101: How to Write Your 1st Professional Legal Memo (FindLaw's Greedy Associates Blog)
- BigLaw 101: How to Keep Track of Billable Hours (FindLaw's Greedy Associates Blog)
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