Filing your income taxes can be scary and confusing, but we’re here to help. In five simple steps, you’ll learn that filing your income taxes isn’t as daunting as it may seem.
1. Fill out a W-4 for your employer.
Whenever you get paid, part of each paycheck goes to the government as taxes.
Your employer should have you fill out a W-4 form each year because it helps determine how much state and federal income tax should be withheld from each paycheck.
Filing your taxes gives the government a record of how much you should have been taxed. The government uses these records to determine if you were taxed the correct amount. If you weren’t, the the government could owe you money, which is why you want to file your taxes!
2. Determine your filing status and how much of your income is taxable.
Your filing status defines who you are in terms of how you will be taxed. Each status comes with its own unique set of tax deductions and credits.
Since the U.S. uses a progressive tax system, the more you earn, the higher your federal income tax will be. These taxation rates are called tax brackets, and they change every year.
Here’s a breakdown of each filing status, and what it means:
Single: You are unmarried and don’t qualify for another filing status. You will be in a lower tax bracket than married couples who file jointly.
Head of household: You are unmarried and pay at least half the cost of housing while financially supporting a child or relative who lives with you. You will be in a more favorable tax bracket than if you filed as single.
Qualified widow or widower: You lost your spouse recently and are supporting a child. This filing status allows you to file as if you were filing jointly with your spouse, and gives you a better tax bracket than if you filed as single.
Married, filing jointly: You are married, and you and your spouse agree that you will be filing your taxes together. You may qualify for a lower tax bracket and get more deductions.
Married, filing separately: You are married, and you and your spouse agree that you will each be responsible for filing your own taxes. You may find that filing separately will let you pay less in taxes, because filing jointly might put you and your spouse in a higher tax bracket.
Note: 2019 income taxes are due on July 15, 2020. This date was pushed back from the normal April 15 deadline because of the coronavirus pandemic. Even though that buys you some extra time, you should always file your income taxes ASAP!
3. Collect the documents you will need to file your income taxes.
You’ll need some documentation when filing your income taxes to prove things such as your income, employment, citizenship, and proof of taxes paid.
Some of the documents you will need are:
- Your social security number or individual taxpayer identification number (ITIN)
- Copies of last year’s tax return (if you have them)
- Bank account information (if using direct deposit to receive any refunds)
- All W-2 Forms and/or 1099 Forms (your employer will give you these, and you may have more than one if you have multiple jobs)
4. Decide if you’ll file your income taxes yourself or by hiring someone to do it for you.
You can either file taxes yourself, or hire someone else to do it. If you do them yourself, you can do this by hand or online. Here’s a breakdown of all your options:
Doing it yourself by hand
Doing your taxes by hand and mailing in your information is not recommended. Not only is it tedious and time-consuming, but the Internal Revenue Service (IRS) actually encourages citizens to use online direct deposit to collect refunds. Filing your taxes online is the fastest and safest way of doing it.
Doing it yourself online
These online systems make it easy for you to submit all of your necessary materials for the government, and they’ll even file your state and federal taxes at the same time for you. While they usually charge a fee to sign up, there are some free alternatives. You may be eligible to receive a free tax filing program from the Internal Revenue Service (IRS) if your total annual income is less than $69,000.
Hiring someone else
If you decide that you’d rather have someone else prepare your taxes, be sure to hire a professional. Certified Public Accountants (CPAs) and Enrolled Agents from the IRS are examples of people you can contact for assistance. Click here to search for tax experts near you.
5. Collect your refund and/or pay owed taxes.
After you finish filing your taxes, you will either receive a refund from the government or you will owe them money.
How to Pay Taxes You Owe
If you owe money, the Internal Revenue Service (IRS) accepts payments through the following ways:
- Use IRS Direct Pay to pay online from a checking or savings account
- Pay with a debit or credit card
- Pay with cash at a retail partner
- Pay with a check, money order, or a cashier’s check
- All checks and money orders should be made out to U.S. Treasury
- Click here to find the mailing address for where you should send check or money order payments
- Remember to include the following information on the check or money order:
- Your name and address
- Daytime phone number
- Social security number (the SSN shown first if it's a joint return) or individual taxpayer identification number (ITIN)
- Tax year
- Related tax form or notice number
Note: The IRS may audit you if they find an error in your tax returns, which might be why you owe them money. That’s why it’s always good to keep a record of your tax returns going back 3-6 years.
How to Collect Your Tax Refund
When the IRS over-taxes your income throughout the year, you will receive a refund. You should receive your refund within three weeks of your filing date. When you file your taxes, you can choose to receive your refund either as a direct deposit into your bank account or as a check in the mail.
You’ll need your social security number or individual taxpayer identification number (ITIN), filing status, and refund amount in order to check your federal refund status.
All of this should give you a basic understanding of how to file your income taxes. Remember, 2019 income taxes are due July 15, 2020!