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You generally have three options when you file your taxes: do it yourself, use a tax preparation software or hire a tax preparer. Whether this is your first year filing taxes or your twentieth year, it can be a confusing and overwhelming process. Here’s a helpful guide on how to file your taxes.
What's in this guide?
- What are my tax filing options?
- How to file your taxes online
- What services can help me file my taxes online?
- Free tax help options
- Should I DIY or get professional help?
- Which type of return is best for me?
- How much will I pay in taxes?
- Federal income tax brackets for 2019-2020
- What deductions can I claim?
- Tax deductions guide: 2019 tax year
- Online tax prep software
- When do I need to file my tax return?
- When should I expect my tax refund?
- Should I get a tax refund?
- Your tax questions answered
Tax filing and payment deadline extended due to COVID-19
Due to the impacts of the coronavirus pandemic, you now have until July 15, 2020 to file and pay your federal taxes. This is a 90-day extension from the original April 15 deadline. It doesn’t apply to state taxes, so check with your state to see when those returns and payments are due.
What are my tax filing options?
You have three options when it comes to filing your taxes: print off your tax form and fill it out yourself, use a tax preparation software, or hire a tax preparer. Here are some things to consider when comparing your options:
|DIY||Tax prep software||Tax preparer|
|Best for accuracy|
|Best for simple returns|
|Best for complicated returns|
|Best for guaranteed highest refund|
How to file your taxes online
If your taxes aren’t too complex, you may be able to file your taxes for free through tax return software or directly with the government. More complicated taxes involving multiple deductions or credits may require a fee.
Step 1: Gather your paperwork.
The first step in filing your taxes is to gather any information that proves you had income and deductible expenses for the year. Some common items you should round-up include:
- Social Security numbers for everyone listed on your tax return
- W-2s or 1099 forms
- Earned interest from bank accounts
- Medical bills and receipts
- Dependent care expenses
- Mortgage interest
- Property taxes
- Sales and local income taxes
- Educational expenses
- Small business-related expenses
- Charitable donations
- Retirement contributions
Step 2: Choose an online provider to file with.
Most brand-name tax return software offer a free e-file version for simple taxes using Form 1040. If you own multiple assets, are claiming deductions or credits or are filing taxes for your business, you’ll want to make sure that the software you choose can handle your needs.
The US government offers a free option to file your federal tax return online through Free File. But you won’t receive guidance or instruction, so you’ll want to make sure you’re comfortable with your tax knowledge before choosing this tax filing option.
Step 3: Sign up and begin your returns.
H&R Block, TurboTax and similar tax services take the guesswork out of filing your taxes. They walk you through how to fill out the various form fields and calculate whether you should take a standard or itemized deduction, so you can make sure you’re receiving your maximum refund. Prompts also cover life events and how they’re incorporated into your return, such as buying a house or car.
Step 4: Double-check everything.
Most services scan your return to alert you of discrepancies or red flags that you might need to address before submitting your taxes. Review your tax return carefully and address any discrepancies the software flags to ensure everything is accurate. Once you’re ready, the tax software submits your forms to the IRS and forwards you tracking information on how to check in on your return.
Step 5: Choose your refund or payment method.
Three out of four people get a tax refund each year. If you’re one of them, select how you want to receive your refund. Direct deposit is typically the quickest route, but you may have other options depending on which software you choose.
If you owe money, you can pay your bill directly through the online tax software. Most accept direct payments from your bank, credit or debit cards, checks and money orders. The IRS also offers installment agreements if you can’t pay your tax bill by the deadline.
To get an idea of how big your tax bill may be, view your federal and state income tax brackets.
Step 6: File your taxes on time.
Submit your return and pay any taxes owed by July 15 to avoid any penalty fees. If you file for an extension, keep in mind that this gives you until October 15 to file your tax return only. Tax payments are still due on July 15.
What services can help me file my taxes online?
Free tax help options
Filing your taxes with a professional doesn’t have to be expensive. Here are five free tax help options worth looking into:
- Basic tax preparation software plans. Many tax preparation software companies offer basic plans that let you file a return for free. But usually, this option only works if you have a simple tax situation with W-2 income, no dependents and no deductions.
- E-file with Free File. If you make less than $69,000, you may be able to file your return for free using a tax preparation software. Visit the IRS website for a list of software companies that let you file for free.
- Volunteer Income Tax Assistance (VITA). This program offers free tax help to low-to-moderate-income taxpayers and members of the military. To see if you qualify, go to IRS’ free tax prep form. Enter your zip code to find a VITA office near you.
- Tax Counseling for the Elderly. If you’re at least 50 years old and have a low-to-moderate-income, you can visit nearly 5,000 Tax-Aide locations nationwide for free, individualized tax preparation. Visit the AARP’s website to find a location near you.
- MilTax. Military members and their families can e-file their taxes for free through MilTax.
Should I DIY or get professional help?
Ultimately, your best route depends on how you’re able to answer three key questions:
- How complicated is your tax return? If you have no dependents and deductions, you may be able to file your own return. But if you’ve had a major life event, such as having a baby or buying a house, a tax software may be a better option. If you own many investment assets, an accountant may be what you need.
- How confident are you with filing yourself? Tax regulations are always changing, and the IRS regularly audits returns for compliance. A reputable online tax service can make sure you aren’t claiming anything you’re not eligible for. And they may even step in if the IRS does come a-knocking.
- What’s your budget for fees? DIYing your taxes may be your cheapest option, but it’s also the most time-consuming and there’s more room for error. Tax preparation fees can vary from low flat rates to those based on a tiered scale, running up to $100 or more. But a tax preparer can make the fee worth it by saving you more on your tax return.
If you’re looking to file your own taxes but want the benefits of professional help, consider a tax preparation software. It gives you the best of both worlds and most platforms come with a Maximum Refund Guarantee.
Which type of return is best for me?
You should know based on your income and circumstances which category you fall into. But here’s a breakdown of the types of returns you may read about:
- Individual tax returns. A common return for people who are employed and earn an income, including those who are self-employed or contractors.
- Partnership tax returns. Returns for businesses in a partnership structure.
- Company tax returns. Returns for private companies that employ more than two people.
- Trust tax returns. Returns typically submitted by trustees to satisfy different tax regulations and rates.
- Corporate tax returns. Returns filed by listed companies on a stock exchange and audited by a third party.
If you’re filing on behalf of a business or company, consider seeking professional advice to avoid running into trouble with the IRS.
Forms you could file
There used to be three tax forms you could file as an individual: 1040EZ, 1040A and 1040. But now there are just two: Form 1040 and 1040-SR for seniors. Depending on your tax situation, you may need to use one of these popular tax forms when submitting your tax form:
Your taxes generally depend on how much you earn and how much you paid in taxes throughout the year, either deducted from your paycheck or paid quarterly, if you’re an independent contractor.
Wondering how federal income tax brackets work? The US uses a progressive tax system, where the more you make, the more you pay. But how much you pay depends on your tax filing status.
Deductions and credits can chip away at how much the government gets to keep — and how much you’re able to keep in your own pocket. Let the $2,869 average individual tax refund for 2019 inspire you to suss out your qualified deductions.
Deductions are expenses that you subtract from your total taxable income, effectively reducing the overall amount of tax you owe the government.The US uses a tiered tax bracket system, so the more you earn, the more you pay — deductions can help take the edge off.
When do I need to file my tax return?
The standard deadline for filing your tax return is usually April 15. But the IRS has pushed this deadline back to July 15 for taxes filed in 2020 due to the coronavirus pandemic.
If you need more time to prepare your return, you can request an extension by filling out Form 4868 by July 15. This gives you until October 15 to file your return, but not extra time to pay your taxes. If you end up owing taxes and pay past July 15, you might be subject to late penalty fees:
- A late payment fee equal to 0.5% a month, up to a maximum 25% of the amount owed.
- A late filing fee equal to 5% of the taxes you owed each month, up to a maximum 25%.
- 5% interest on any unpaid taxes until your bill is paid in full.
When should I expect my tax refund?
If you file taxes online, expect to receive your refund within 21 days. If you file by mail, it could take as long as six weeks.
You can track the status of your refund using the Where’s My Refund tool on the IRS website.
Should I get a tax refund?
Everyone wants a giant refund come tax time, but it’s not as glamorous as you think. A big tax refund means you paid too much money to the IRS—money you could’ve been using each month to pay bills and cover unexpected expenses. Likewise, a big tax bill means you didn’t pay nearly enough. Ideally, you should aim to break even each year. This is a goldilocks tax situation because it means you paid just the right amount to the IRS.
If you want to avoid paying too much or too little taxes, adjust your W-4. This form tells your employer how much federal and state tax to withhold from each paycheck. If you’re currently facing a large tax bill, increase your W-4 withholdings. If you’re getting a giant refund, decrease your W-4 withholdings.
You can adjust your W-4 at any time with your employer, but it’s better to do it as soon as possible. If you need help calculating how much you should withhold from each paycheck, use the IRS tax withholding estimator.
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