The new year marks the official beginning of tax season, but do you know how to file taxes the right way? After working hard all year long, many people shudder at the very thought of 1040s and W2s, but luckily, the process isn't too tricky with the right information by your side. Let's dive into the basics of how and when can you file taxes, so you can file with total confidence!
Forms That You May Need
While the old system was full of confusing paperwork like the 1040A and 1040EZ forms, the IRS has created a new 1040 form that is the size of a postcard. The 1040 tax form is the standard federal income tax form that you'll need to report your income properly, so don't forget that number! So, where do you pick it up? You can easily download the 1040 tax form online for convenience, but if you'd prefer a hard copy, there are many locations that you can visit. Post offices, libraries, tax centers, and IRS offices across the nation have the supplies you need to file by the deadline of April 15th.
Factors That Affect Taxes
Why do taxes vary so much from person to person?
- Filing status: You will fall into one or more of the following categories: single, married filing separately, married filing jointly, head of household, qualifying widow with dependent.
- Dependents: You can file up to four dependents, which may qualify for the Child Tax Credit. Any additional dependents must be included on a separate tax form.
- Income: Your taxable income isn't just the sum of your annual wages. This can also include your stock profits, real estate sales, lottery winnings, inheritance, and other funds.
- Tax Deductions: You might qualify for tax credits or tax deductions that reduce your taxable income. Be sure to double check the qualifications that you'll need, and if you have any questions, contact a professional to be on the safe side!
Methods of Filing
The digital age has made tax preparation easier than ever before. Before you can claim that hefty tax refund, you'll need to select your method of filing:
Paper filing: Grab a 1040 form and take matters into your own hands by filing the traditional way. While this method involves no extra fees, you won't have the additional resources that a tax professional or filing software can provide.
Tax professional: Feeling overwhelmed this tax season? Leave the hard work to the pros and consider hiring a tax preparation service. This ensures that you'll get the most accurate return with the largest possible savings, but you'll need to spend some extra cash for the extra peace of mind.
Tax software: Tax preparation software combines the best of both worlds, offering some guidance to your tax questions while offering the convenience of at-home filing. Plus, these services will automatically file your taxes online upon completion for fast results.
Not sure which method is right for you? Check out our tax FAQs!