Does the IRS give some help or leniency to first-time taxpayers?
"There's no such thing as ""leniency"" when enforcing the law. Not knowing the law, as you have probably heard, is not a valid legal defence. Tax law is a law like any other. That said, some penalties and fines can be abated if the error was done in good faith and due to a reasonable cause. First time penalties can be abated in many cases assuming you're compliant otherwise (for example - first time late filing penalty can be abated if you're compliant in the last 5 years. Not many people know about that.). Examples for a reasonable cause (from the IRS IRM 20.1.1): Reliance on the advice of a tax advisor generally relates to the   reasonable cause exception in IRC 6664(c) for the accuracy-related   penalty under IRC 6662. See IRM 20.1.5, Return Related Penalties, and If the taxpayer does not meet the criteria for penalty relief under   IRC 6404(f), the taxpayer may qualify for other penalty relief. For   instance, taxpayers who fail to meet all of the IRC 6404(f) criteria   may still qualify for relief under reasonable cause if the IRS   determines that the taxpayer exercised ordinary business care and   prudence in relying on the IRS’s written advice. IRM 20.1.1.3.2.2.5 -   Erroneous Advice or Reliance.   Treas. Reg. 1.6664–4(c). There are more. IRM is the ""Internal Revenue Manual"" - the book of policies for the IRS agents.  Of course, you should seek a professional advice when you're non-compliant and want to ask for abatement and become compliant again. Talk to a CPA/EA licensed in your state." No, there is no special leniency given to first time tax payers. In general, this shouldn't be an issue. The IRS collects your taxes out of every one of your paychecks throughout the entire year in what is called a Withholding Tax. The amount that the IRS withholds is calculated on your W-4 Form that you file with your employer whenever you take a new job. The form helps you calculate the right number of allowances to claim (usually this is the number of personal exemptions, but depending upon if you work a second job, are married and your spouse works, or if you itemize, the number of allowances can be increased. WITHHOLDING TAX Withholding tax (also known as “payroll withholding”) is essentially income tax that is withheld from your wages and sent directly to the IRS by your employer. In other words, it’s like a credit against the income taxes that you must pay for the year. By subtracting this money from each paycheck that you receive, the IRS is basically withholding your anticipated tax payment as you earn it. In general, most people overestimate their tax liability. This is bad for them, because they have essentially given the IRS an interest free loan (and weren't able to use the money to earn interest themselves.) I haven't heard of any program targeted at first time tax payers to tell them to file a return, but considering that most tax payers overpay they should or they are giving the government a free grant. It might not be leniency for first time payers, but they do have programs, some federal some local, that help the poor and elderly complete their tax forms. There are also programs that allow the poor to file electronically for free. For most people the first time they file their taxes they are using the EZ form. Which is rather easy to do, even without the use of either web based or PC based software. The software tools all ask enough questions on the EZ forms to allow the user to know with confidence when their life choices have made it advantageous to use the more complex forms. The web versions of the software allow the taxpayer to start for free, thus reducing their initial investment for the software to zero. Because the first time filer is frequently a teenager the parents are generally responsible for proving that initial guidance.  The biggest risk for a young taxpayer might be that the first year that itemizing deductions might be advantageous. They might never consider it, so they over pay. Or they discover in April that if they had only kept a receipt from a charity six months ago they could deduct the donation, so they are tempted to  claim the donation without proof. Regarding leniency and assistance there is an interesting tax credit. The Earned Income Tax Credit. it gives a Tax credit to the working poor. They alert people that they need to Check Your Eligibility for the Earned Income Tax Credit They know that significant numbers of taxpayers fail to claim it. EITC can be a boost for workers who earned $50,270 or less in 2012.   Yet the IRS estimates that one out of five eligible taxpayers fails to   claim their EITC each year. The IRS wants everyone who is eligible for   the credit to get the credit that they’ve earned. The rules for getting the credit are simple, all the information needed to claim it is already on the basic tax forms, but you have to know that you need a separate form to get the credit. But instead of making the credit automatic they say: If you use IRS e-file to prepare and file your tax return, the   software will guide you and not let you forget this important step.   E-file does the work and figures your EITC for you! and then :  With IRS Free File, you can claim EITC by using brand name tax   preparation software to prepare and e-file your tax return for free.   It's available exclusively at IRS.gov/freefile. Free help preparing   your return to claim your EITC is also available at one of thousands   of Volunteer Income Tax Assistance sites around the country. To find   the volunteer site nearest to you, use the VITA locator tool on   IRS.gov. But if you don't use free file you might never know about the form. Apparently it escapes 20% of the people who could claim it.
And so what was the logical alternative?  How does Hank Paulson:  1.   Get $150-300 billion dollars into the hands of individual taxpayers so that they don't default on their home mortgages and wipe out the banking system?  2.  Make sure the $150-300 B is going to individuals who actually need the capital, weren't bad actors in taking on too much debt and causing everyone else significant harm by engaging in risky borrowing?  3.  Sufficiently protect the $150-300 B in loans so that the US Gov't can get paid back and not have it be some massive giveaway of taxpayer dollars?    And all this had to be done within a matter of days.  Ontop of which, why aren't you railing against the irresponsible automakers who didn't pay back their TARP loans and instead were forgiven, while the banks paid back their loans in full with interest and a profit to the US Taxpayer?  The automakers and the unions basically got free money (after Obama came into office and under his direction) on the back of the taxpayer.  Isn't that crony capitalism when unions who are Democratic sympathizing voters get loans that are ultimately forgiven by the federal government?  The whining you make about private entities like Berkshire, who did nothing to create the crisis and merely took advantage of it, with little to no help from the federal government is remarkable.  It's like straight out of a socialist playbook. This isn't exactly an answer, but I can not comment at the moment.  I have bought a house in NZ in the last year, being my first. There are a couple of things that you might need to watch out for with the First Home Subsidy (the $5000), especially the one that says that you have to live in the house that you buy for a certain amount of time otherwise you have to pay it back.  I also assume that you have been in Kiwisaver (the superannuation) for at least 5 years? You can only take $1000 for each year you have been in there up to $5000. You can take all of the Kiwisaver funds except what the Government has put in, so if you have $4000 from your employer, then you would probably have more in your contributions that you could use as well.  You don't have to have the 20% deposit to be able to buy a house, I went through a broker, and was able to get in with less. Not sure on the exact percentage. The 20% does help to get the bank to put some extra funds in for legal fees etc. My house wasn't an investment property, but I hope this helps. I think you are mixing up forward looking statements with the actual results. The funds objective   The fund invests primarily in stocks that tend to offer current dividends. It focuses on high-quality companies that have prospects for long-term total returns as a result of their ability to grow earnings and their willingness to increase dividends over time Obviously in 1993 quite a few companies paid the dividends and hence VDIGX was able to give dividends. Over the period of years in some years its given more and in some years less. For example the Year 2000 it gave $ 1.26, 1999 it gave $ 1.71 and in 1998 it gave $ 1.87 The current economic conditions are such that companies are not making huge profts and the one's that are making prefer not to distribute dividends and hold on to cash as it would help survive the current economic conditions. So just to clarify this particular funds objective is to invest in companies that would give dividends which is then passed on to fund holders. This fund does not sell appreciated stocks to convert it into dividends. If your gross income is only $3000, then you don't need to file: https://www.irs.gov/pub/irs-pdf/p501.pdf That said, pay careful attention to: https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad You should be reporting ALL income, without regard to WHERE you earned it, on your US taxes. Not doing so could indeed get you in trouble if you are audited. Your level of worry depends on how much of the tax law you are willing to dodge, and how lucky you feel. "I'm mostly guessing based on existing documentation, and have no direct experience, so take this with a pinch of salt. My best understanding is that you need to file Form 843. The instructions for the form say that it can be used to request: A refund or abatement of a penalty or addition to tax due to    reasonable cause or other reason (other than erroneous written    advice provided by the IRS) allowed under the law. The ""reasonable cause"" here is a good-faith confusion about what Line 79 of the form was referring to. In Form 843, the IRC Section Code you should enter is 6654 (estimated tax). For more, see the IRC Section 6654 (note, however, that if you already received a CP14 notice from the IRS, you should cross-check that this section code is listed on the notice under the part that covers the estimated tax penalty). If your request is accepted, the IRS should issue you Notice 746, item 17 Penalty Removed: You can get more general information about the tax collection process, and how to challenge it, from the pages linked from Understanding your CP14 Notice" It's called bartering and the IRS has a page titled Four Things to Know About Bartering. The summary is -  The bottom line is this is taxable. "They are basically asking for the name of the legal entity that they should write on the check. You, as a person, are a legal entity, and so you can have them pay you directly, by name. This is in effect a ""sole proprietorship"" arrangement and it is the situation of most independent contractors; you're working for yourself, and you get all the money, but you also have all the responsibility. You can also set up a legal alias, or a ""Doing Business As"" (DBA) name. The only thing that changes versus using your own name is... well... that you aren't using your own name, to be honest. You pay some trivial fee for the paperwork to the county clerk or other office of record, and you're now not only John Doe, you're ""Zolani Enterprises"", and your business checks can be written out to that name and the bank (who will want a copy of the DBA paperwork to file when you set the name up as a payable entity on the account) will cash them for you. An LLC, since it was mentioned, is a ""Limited Liability Company"". It is a legal entity, incorporeal, that is your ""avatar"" in the business world. It, not you, is the entity that primarily faces anyone else in that world. You become, for legal purposes, an agent of that company, authorized to make decisions on its behalf. You can do all the same things, make all the same money, but if things go pear-shaped, the company is the one liable, not you. Sounds great, right? Well, there's a downside, and that's taxes and the increased complexity thereof. Depending on the exact structure of the company, the IRS will treat the LLC either as a corporation, a partnership, or as a ""disregarded entity"". Most one-man LLCs are typically ""disregarded"", meaning that for tax purposes, all the money the company makes is treated as if it were made by you as a sole proprietor, as in the above cases (and with the associated increased FICA and lack of tax deductions that an ""employee"" would get). Nothing can be ""retained"" by the company, because as far as the IRS is concerned it doesn't exist, so whether the money from the profits of the company actually made it into your personal checking account or not, it has to be reported by you on the Schedule C. You can elect, if you wish, to have the LLC treated as a corporation; this allows the corporation to retain earnings (and thus to ""own"" liquid assets like cash, as opposed to only fixed assets like land, cars etc). It also allows you to be an ""employee"" of your own company, and pay yourself a true ""salary"", with all the applicable tax rules including pre-tax healthcare, employer-paid FICA, etc. However, the downside here is that some money is subject to double taxation; any monies ""retained"" by the company, or paid out to members as ""dividends"", is ""profit"" of the company for which the company is taxed at the corporate rate. Then, the money from that dividend you receive from the company is taxed again at the capital gains rate on your own 1040 return. This also means that you have to file taxes twice; once for the corporation, once for you as the individual. You can't, of course, have it both ways with an LLC; you can't pay yourself a true ""salary"" and get the associated tax breaks, then receive leftover profits as a ""distribution"" and avoid double taxation. It takes multiple ""members"" (owners) to have the LLC treated like a partnership, and there are specific types of LLCs set up to handle investments, where some of what I've said above doesn't apply. I won't get into that because the question inferred a single-owner situation, but the tax rules in these additional situations are again different." Yes that is not an unusual number. In some states the state tax rate is fairly flat, and unless you are highly paid the social security and medicare taxes are also flat. The big issue is the federal number. Several things can make make the federal taxes for the early paychecks larger than normal. later checks will include these pretax amounts which will reduce the taxable income, and the taxes. Though the net check will get smaller. Keep in mind that the size of the checks your first year are impacted by the fact that most recent graduates start in the summer. The tax tables assume that each of the paychecks you receive will be essentially the same. For those recent graduates the 1st real paycheck dwarfs the average paycheck for the first part of the year. This can put you in a higher bracket than you should be, and result in a large refund when you file in the spring.  You can adjust your withholding numbers after a few checks to counterbalance this. Of course the numbers will need to be changed back in year two to to avoid under withholding.