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How to file a tax return yourself: step-by-step instructions

We will not pretend that taxes are fun. Taxes are a burden. But for most people, it’s not so difficult to put their tax affairs in order. Instructions on how to file a tax return are offered The Penny Hoarder.

Photo: Shutterstock

What you need to do first

Making more money is almost always good. But it’s also true that the more you earn, the more taxes you have to pay - at least until a certain point (no wonder they say: more money - more problems).

At the opposite end of the spectrum, a different situation. You may be exempted from filing a tax return if you do not meet the IRS income threshold that may change. The basic number you need to know is $ 12. This is the income threshold, after which single people under 200 need to file taxes.

But more specific requirements are determined by other aspects of your filing status, such as marital status and your dependents.

For example, if you are married and apply together, the income threshold doubles to $ 24 - and increases even more if one of you or both have already celebrated your 400th birthday. The numbers also change if you are a widow / widower or head of your family.

There are many practical rules regarding filing tax returns. For example, you should always file taxes if they are withheld in your paycheck, and you cannot claim a tax exemption on your own if you are a dependent.

But the best way to determine if you need to file a tax return is to use free online IRS tool, which takes about 12 minutes to work with and allows you to find out the exact answer to this question.

How your taxes are calculated

So, you have successfully determined whether you need to file a tax return. It's time to find out how much you - or you - owe.
Your taxes are calculated on the basis of a number of personal data, such as how much money you earned in a given tax year, how much you have already paid in taxes, and even your personal relationships matter.

That is, your tax burden will be different if you file an application alone or married together, if the children or other relatives depend on you in terms of financial support (this is the dependents).

Your federal income tax is determined by tax classes that increase as a percentage as your total income increases. For 2019, there are 7 federal classes, ranging from 10% to 37% of your income.

10% of income

  • 0% (taxable income for single);
  • 0% (taxable income for joint filing in marriage);

12% of income

  • $ 9700 (taxable income for single);
  • $ 19 (taxable income for joint filing in marriage);

22% of income

  • $ 39 (taxable income for single);
  • $ 78 (taxable income for joint filing in marriage);

24% of income

  • $ 84 (taxable income for single);
  • $ 168 (taxable income for joint filing in marriage);

32% of income

  • $ 160 (taxable income for single);
  • $ 321 (taxable income for joint filing in marriage);

35% of income

  • $ 204 (taxable income for single);
  • $ 408 (taxable income for joint filing in marriage);

37% of income

  • $ 510 (taxable income for single);
  • $ 612 (taxable income for joint filing in marriage).

Along with federal income taxes and your Social Security and Medicare contributions, you will also be responsible for filing a state return and paying state income taxes if you do not live in one of the 7 states that do not charge them:

  • Alaska;
  • Florida;
  • Nevada;
  • North Dakota;
  • Texas;
  • Washington;
  • Wyoming.

Rates in the other 43 states range from as much as 13% to almost zero, and can vary by income or be priced at a fixed rate. Contact a professional in your area (or just google) to find out the details of the tax laws in your state.

On the subject: 8 unexpected things that are taxed in the USA

Deductions and loans

You may be entitled to certain tax deductions, such as interest on student loans. Tax deductions can reduce a significant portion of what you would otherwise have to pay the IRS, sometimes significantly increasing your return by reducing your overall taxable income.

This is especially true if you are a freelancer, in which case you can write off a number of business expenses, which people working from 9 to 17 cannot do.

You can also deduct interest paid on your mortgage, charitable donations, and more. Or, in your interests, to take the standard deduction, which for 2019 is quite generous $ 12 for single applicants (or $ 200 for those who are married and file a joint declaration).

There are also certain tax credits that you can apply for, for example, American Opportunity Creditwhich offers some students up to $ 2500 a year to offset college costs, or Child care credit, which offers some guardians up to $ 3000 each to offset the cost of children.

Contribution to the retirement savings It can also give you a tax credit of up to 50% of your retirement plan, depending on contributions, type of account, and gross adjusted income.

Tax credits are different from deductions: a deduction reduces your taxable income, and a tax credit reduces what you owe to the government.

Important calculations

If this is your first time filing a tax return, most likely your situation will not be too complicated and you can deal with the simplest version of the IRS form - Shape 1040.

This document uses information about your income, taxes withheld, marital status and dependents to determine whether you will give or receive money.

Most people fill out this form using W-2 issued by your employer as a guide. It shows your total salary and deductions, including federal income tax, Medicare, and Social Security. It is distributed by employers no later than January 31, and today it is often digital.

The equivalent of W-2 for a freelancer is Form 1099, although these documents do not contain tax withholding information, as independent contractors themselves are responsible for this.

The more complex your financial landscape, the more difficult it will be to file a declaration and the more forms you will need to add to it. For example, if you have additional sources of income from capital gains, unemployment compensation, gambling or prizes, you need to submit a form Schedule 1 together with form 1040.

There are also additional forms for those who have to pay self-employment tax or may require a repayable loan (the IRS lists some of the common additional filing scenarios and necessary documents on its page "About the form 1040").

Of course, the calculations themselves can be tricky - so many people turn to software or professional services to make the tax process less time consuming. Costs vary from a few dollars for updating a digital registration to paying for an accountant.

On the subject: 4 legal tax loopholes to save thousands of dollars in 2020

How to file a tax return

It's time to put away the calculator and file your tax return. You have several options, more or less convenient or expensive compared to others.

These options are:

  • Fill out an electronic documentusing free IRS tool. This is a good option for those who have relatively simple taxes, especially if you earn less than $ 69 (those who earn more can still use this tool, but the software does only basic mathematical calculations and state tax preparation is not available) .
  • Fill out an electronic document using private tax software such as TurboTax or H & R Block. Most of these services offer a free registration option, and they make the process very simple: just fill out a few forms, click a few buttons and your tax return will be open. The free service extends to the main federal and state taxes, which makes it more complete than the IRS tool. However, if your financial situation is more difficult - for example, income includes interest on mortgages or profits from renting real estate - you may have to go to a paid level with a commission of $ 80 to $ 100.
  • Submit paper declarations - send manually completed paper forms to the IRS by mail. It’s certainly cheap, but it’s also a great way to make mistakes, especially if you are not a tax specialist. But if you are confident in your calculator, here full list of mailing addresses IRS by state.
  • Hire a Tax Specialist. Although this is perhaps the most expensive move on this list, it is also the least stressful - and if you do enough to cover it without much budget shifts, it might be worth it. A certified accountant or tax authority can guarantee that you will receive the most generous refund possible - and you won’t have to count anything.

After you submit your application, you will receive a tax refund - if you owe it - within about four weeks, either by paper check or by direct deposit.

Similarly, if you owe taxes, you can pay them through a digital system by direct transfer or credit card, or mail a paper check to the correct address for your state.

Last tip: Be sure to also take into account state taxes, which may have to be sent to another address that you will find on the official website of the department of taxation and income of your state.

Although Tax Day is not a favorite holiday, we hope that filing taxes will not become a serious difficulty for you. And this process has a nice bonus for some people - tax refunds in time for the summer.

Miscellaneous tax return Educational program taxes in the USA taxes 2020 Special Projects

Read also on ForumDaily:

7 risks of tax fraud without even knowing it

8 unexpected things that are taxed in the USA

From fine to jail time: what happens if you don't pay taxes

List of benefits and allowances for which an immigrant may be recognized as a 'social burden'

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