Tax return season is upon us, and filing your tax returns can seem daunting for many. With the right resources and guidance, however, doing your taxes can be a breeze. Whether you file on paper, online with tax software, or in person with a tax preparer, you must take steps to ensure that your return is complete and accurate. Here’s a step-by-step guide on how to file your tax returns in the simplest way possible, breaking down the three main ways to file.
Whichever way you choose, remember to do your taxes by the tax filing deadline. This year, it falls on April 18, 2023.
How to File Your Tax Returns on Paper:
Step 1: Gather the Necessary Documentation
Before you begin filing your tax return, you'll need to gather all the necessary documentation, starting with the forms that indicate your wages and salary information for that tax filing year – whether you're a salaried employee or a freelancer. If you're a salaried employee, this will be a W-2 form that you will receive from your employer, and if you're a freelancer or earn money from contract jobs (more than $600 for that tax year), it will be a 1099 form. Both of these forms are documentation showing your income and tax deductions for the year.
Step 2: Obtain the Required Forms
You must obtain the required forms to file your tax returns on paper. You can obtain these forms from the Internal Revenue Service (IRS) website, or by calling the IRS toll-free number and having them sent to you. The most common forms you will need are the 1040, 1040A, or 1040EZ form, along with any additional forms specific to your situation (such as the Schedule A for itemized deductions):
- Form 1040: The most commonly used form by the majority of taxpayers, this form is used to report your annual income and calculate your federal income tax liability.
- Form 1040A: A simplified version of form 1040, this will be the appropriate form for you if you have a straightforward tax situation with limited income and deductions, and if you do not contribute to an IRA, pay student loan interest, or qualify for tax credits.
- Form 1040EZ: An even simpler version of the form, choose this form if you make less than $100,000 a year and do not have any dependents, adjustments to your income or claim tax credits.
Step 3: Fill Out the Forms
Once you have all of your forms and documentation, it’s time to start filling out your tax returns. Fill out the forms with the information from your W-2 and other income forms, along with any deductions and credits you are claiming. A deduction is an expense that can be subtracted from your taxable income, like claiming your status (married, single, etc.), expenses like medical and dental expenses, mortgage interest, charitable contributions you made throughout the year and more. A tax credit, on the other hand, directly reduce the amount of tax you owe, like the Child Tax Credit.
Step 4: Mail the Forms to the IRS
Once you have completed the forms, you will need to sign and date them, and then mail them to the IRS. Make sure to keep a copy of the forms for your records.
The IRS website lists the proper addresses to mail your forms to.
The Pros & Cons
Pros of Filing Your Tax Returns on Paper:
- Straightforward: It is a relatively simple way to file your return without having to worry about doing research and choosing a tax preparer or tax software option.
- Secure: Filing on paper allows you to retain a physical copy of your tax return for your records.
Cons of Filing Your Tax Returns on Paper:
- Slow: The IRS takes four weeks or more for the IRS to process, as opposed to about 21 days for returns filed online.
- Error-prone: When filing by hand, you're prone to human error, especially if it's your first time filing your return and you're unfamiliar with the process.
How to File Your Tax Returns Online with Tax Software:
When tax season rolls around, many people ask themselves, “Can I do my my taxes myself?" The good news is that doing your taxes on your own today it is easier than ever. With online tax software, learning how to do taxes yourself step by step is a very simple process for easy tax filing. Below are the steps for filing your tax returns online with tax software.
Step 1: Gather documentation
As noted above, this will be the same process as filing your tax returns on paper.
Step 2: Choose a tax software
Many tax software options are available, including popular brands such as TurboTax, H&R Block, and TaxAct. Do some research and compare the features and prices of each option to find the best fit for your needs. Lendstart has ranked and compared reputable tax software providers including the pros and cons of using each.
Step 3: Create an account
Once you have chosen a software, create an account and follow the instructions to begin the tax filing process. The software will ask you a series of questions to determine your tax situation and will guide you through the process of entering your information and calculating your taxes owed or refund.
Step 4: Review and submit
After entering all of your information, review it carefully to make sure it is accurate and complete. If everything looks good, submit your return electronically to the IRS.
- Convenient and accessible: Tax software can be accessed from anywhere with an internet connection, making it easy to file your taxes from home or on the go.
- User-friendly: Most tax software options are designed to be user-friendly, with step-by-step instructions and helpful tools to make the process as simple as possible.
- Affordable: Tax software is often more affordable than hiring a tax preparer, making it a cost-effective option for those with straightforward tax situations.
- Limited support: While tax software provides helpful resources and support, it may not be as comprehensive as working with a live tax preparer.
- Error-prone: If you make mistakes or enter information incorrectly, it can result in errors on your tax return that could result in additional fees or penalties.
In-Person with a Tax Preparer
One final way for easy tax filing is to file in person with a tax preparer. The steps to do so are below.
Step 1: Schedule an appointment
Find a tax preparer in your area and schedule an appointment. You can look for a tax preparer in your area by searching online, asking for recommendations from friends or family, or checking with a professional organization such as the National Association of Tax Professionals (NATP) or the National Society of Accountants (NSA).
Step 2: Gather documentation
Before your appointment, gather all the necessary documentation as noted above in the prior options.
Step 3: Meet with the tax preparer
During your appointment, meet with the tax preparer and provide them with your documentation and information. They will ask you questions to determine your tax situation and will use their expertise to calculate your taxes owed or refund.
Step 4: Review and sign
After your return has been prepared, review it carefully to ensure it is accurate and complete. If everything looks good, sign the return and let the preparer submit it to the IRS on your behalf.
Pros of Filing Your Taxes In-Person with a Tax Preparer
- Accuracy: Tax preparers are experts in tax laws and regulations and can help ensure that your returns are accurate and complete.
- Time-saving: Filing taxes can be time-consuming and stressful. Hiring a tax preparer can save you time and take some of the stress away.
- Maximal Refund: Tax preparers can help you maximize your refund by identifying all the deductions and credits you’re eligible for.
Cons of Filing Your Taxes In-Person with a Tax Preparer
- Cost: Hiring a tax preparer can be expensive, especially if you have a complex tax situation.
- Dependence: You’ll have to rely on the expertise of your tax preparer, so make sure you choose someone you trust.
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Filing taxes can be a complex and daunting process. There are three main ways to file your tax returns - on paper, online with tax software, and in-person with a tax preparer. Each method has its own advantages and disadvantages, and the best one for you will depend on your individual needs and circumstances. If you are comfortable working online and have a basic understanding of taxes, online tax software can be an affordable and efficient way to file your tax return. If you prefer hands-on help or have a complex tax situation, a tax preparer may be the best option for you. Finally, if you prefer the traditional method, filing on paper may be the way to go. Regardless of which method you choose, it is important to gather all the necessary documentation, review your tax return carefully, and make sure you are taking advantage of all the deductions and credits available to you.
Whatever you do, ensure you submit your return by the national deadline. For this year, it's April 18, 2023.