It’s exciting to bring home a paycheck and enjoy the fruits of your labors, especially if you’re just starting out on your own. But that joy is quickly tainted by the IRS, the government service who collects income taxes.
The money you’ve earned is not entirely yours, and along with having to pay taxes, you have to figure out how to file them correctly. The consequences for filing taxes incorrectly or not filing them at all are severe.
There are many online services that can help you file your taxes for a fee, but you likely miss out on important deductions and credits that would have amounted to huge savings! Your return isn’t fully customized to you because it’s following a pre-programmed, step-by-step process.
You could try filing your taxes yourself, as well, but don’t do so without preparation. You might forget vital forms or make mistakes with your math. This will lead to excessive fees and a potential audit from the IRS.
So, before doing your own taxes, do your research. Start with the basics and use this simple guide to help you file your taxes successfully the first time.
Before diving into this guide, make sure you actually need to file taxes. Anyone who is 18 or over and makes more than a certain amount according to their filing status must file taxes.
For singles or independents, you must file if you make more than $12,200 per year. Those married filing jointly only have to file if making more than $24,400 per year.
Dependents, meaning those who rely on a parent or guardian for most of their support, have different requirements. They must file if they make more than $1,100 in a year from investments or dividends of more than $6,350 from a job.
If you’re filing as head of household, you’re over 65, or you’re a widow or widower, there may be other requirements for filing. The IRS has a handy tool that helps you determine if you need to file your taxes, so if you’re still uncertain, use this resource.
Please note that if you made less than the qualifying amount, but you had taxes deducted from your checks automatically, you’ll want to file a return to get back what you didn’t owe.
When you’ve determined that you do, indeed, need to file taxes, gather all the documents you’ll need. Depending on your source of income, contributions you’ve made, and other factors, you’ll need some or all of the following:
Other miscellaneous documents you’ll need:
It’s important to keep all of your forms and documents on hand for at least seven years in case you’re audited. An audit is an investment the IRS performs if there are any suspicions that you were not eligible for the deductions or credits you claimed. Keeping receipts and other proof around for this long will enable you to provide evidence if audited.
Don’t be too worried about an audit, however. If you’re doing your taxes correctly, you don’t have to be worried. Additionally, it’s extremely rare. Only about 0.5 percent of all returns are audited.
With the required documents in hand, you can begin filling out the forms required to get your return. The most used federal form is the 1040 form, which pretty much everyone uses. There are several different types of 1040 forms. They can be found on the IRS website, and they have detailed descriptions to help you determine which version you need.
Some taxpayers can complete their filings with just Form 1040, but others need additional forms called Schedules. There are six schedules—determine if any of them apply to you, fill them out, and attach them to your 1040.
You can find each schedule on the IRS website with a detailed description to determine which must be attached to your Form 1040. Your state will likely need more forms to go with your federal return, so check with your state tax department to learn more.
After filling out all associated forms, including copies of all necessary documentation, and triple checking that all the math and information is correct, you’re ready to file.
The easiest and recommended way is e-filing. It’s fast, easy, and you’re not likely to make mistakes because the system will check your math and note any missing fields. You can use step-by-step online software programs to collect your information, question by question, and fill out the forms on your behalf, or you can use automated systems that let you fill out the forms electronically.
Depending on your income and the complexity of your taxes, you may be able to e-file at no cost. Otherwise, the fee is usually under $100. Once filed, you can have the refund submitted electronically to your bank account, usually within just a couple of weeks.
You can also mail your forms, which is best if you fill out each paper form by hand. There are IRS locations all over the country that receive mailed-in forms, and you can find your location on the IRS website.
This method is slower and opens you up to more mistakes, but it is there. It usually takes up to two months to get your forms processed this way, and you’ll receive your refund by mail in check form.
Of course, you’re capable of successfully filing your taxes on your own, but a single blog post can’t fully prepare you. You’ll need to do more research to get the right forms, do the math correctly, and claim the highest deductions and tax credits. The pressure is on!
So, instead of filing on your own, let the professionals at Taxfyle do it for you. We connect you with licensed CPAs who can file a customized tax return for you. Our CPAs know all the deductions, all the tax credits, all the forms, and all the right questions to ask. With our help, you can get the biggest return yet while barely lifting a finger to make it so.
There’s a fee when using a CPA, of course, but when compared with the extra deductions and credits that your CPA will find you, it’s more than worth it. You have nothing to lose by using our services. Learn more or get started by clicking here now!
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