How to file your own taxes
Table of Contents
When to file your taxes, avoiding mistakes and how to prepare and start processing your US federal income tax return.
Maintain your paperwork
Ensure you remain on top of tax-related paperwork throughout the year and have it organized. You should think about keeping receipts for relevant things such as charitable donations, medical bills, or work-related expenses, alongside statements from student loans, grants, or investments. You should continue to keep this paperwork after you have filed your return for at least three years.
Ensure you are aware of the deadlines
After your tax documents arrive in January or February, you’ll have about two months to prepare your tax return for the April 15 deadline. Ensure you start your return in advance, so you have time to locate any missing documents or get help if needed. The earlier you file, the more likely you are to avoid tax-related identity theft and will receive any refunds you are owed sooner.
You can file for an extension of six months to submit your US tax return – October 15. You will still need to pay your taxes due in full by the due date of April 15, in order to avoid penalties and interest.
Keep track of your income and look out for arriving income documents
If you have more than one job, you will need to add up your income from all of your employers. Income from other sources such as rental property, sales, investments or interests will be included on your return. Be sure to save yourself a lot of time and difficulty by keeping a record of these incomes as they come in, throughout the year.
When you file, you will need to use the documents issued by your employers or other income sources, that specify how much you have earned, to fill out Form 1040.
The documents issued are as follows:
- Form W-2 if you are a full-time employee
- Form 1099-NEC if you are a freelancer or contractor
- Forms 1099-DIV or 1099-INT if you received income from dividends or interest earned on investments
- Form 1098-T if you are a college student
- Form 1098-E for student loan interest you’ve paid
Expect to receive these documents in January or February.
Help me get my child tax credit refund
Figure out which credits and deductions you can take
Here are some credits and deductions that you should consider when collecting your documents for filing:
- Saver’s credit: if you are neither a full-time student nor being claimed as a dependent on someone else’s tax return, you could be eligible for a tax credit if you contribute to a retirement plan. The amount of credit you could receive is dependent on your filing status and AGI (adjusted gross income). For the tax year 2021, as a single filer with an AGI of $33,000 or less, you may be eligible. If you are married filing jointly with an AGI of $66,000 or less, you may be eligible.
- Freelance expenses: if you are self-employed working freelance, you may be able to claim deductions for work-related expenses including office supplies or industry subscriptions.
- Student loan interest: depending on your AGI, you may be able to deduct up to $2,500 in interest payments.
- Charitable deductions: generally, you should be able to deduct charitable donations if you itemize your taxes.
Choose a method to file your tax return
You are able to choose between several options for preparing and filing your tax return.
Free file: if your AGI (adjusted gross income) is under a certain threshold, the IRS provides free tax preparation software that can help you to figure out any deductions or credits you are eligible for.
IRS online forms: if your AGI is over a certain threshold, the IRS provides electronic versions of the paper forms that will do the math for you. However, this option does not provide the same guidance in figuring out which deductions or credits you may be eligible for.
Tax preparer: you may need one-to-one guidance from a tax professional. It can be difficult selecting an expert as they will be given access to your personal information. If you don’t know who to go to, the IRS provides a directory of verified tax preparers.
Tax preparation software: you can also pay a fee to use online tools that are available through providers. They will guide you through preparing your return and help you to figure out if you are eligible for any deductions or credits.
