F iling taxes is no one’s idea of a good time. If you’re new to filing taxes, it can seem intimidating, overwhelming, or just plain boring. The internet is flooded with resources and businesses, all promising to simplify tax season or take it off your plate entirely.
When you’re learning how to file tax returns, these businesses are tempting. However, choosing someone to do your taxes is a bit like buying a car: shopping around won’t help if you don’t know what you’re looking for.
Our start to finish guide to filing your tax return will help you learn how, why, and where you can file your tax return. Once you have a good idea of what you’re looking for, you can jump headfirst into tax season confidently!
How To File Tax Returns (And Why You Should Never Skip It)
While learning how to file a tax return, you might wonder if filing your return is even worth it. After all, lots of people skip filing their returns every year. It can’t be a big deal, right? Well, yes and no.
Some people have a filing requirement. This means that the amount you make or dependents you have, depending on your filing status, requires you to file a tax return, even if you’re a W-2 worker and don’t have any other income.
Most people are required to file tax returns, and not filing or filing incorrectly could lead to you being audited. Being audited basically means that you have to file your tax return with the IRS reading over your shoulder. Auditing can be time-consuming, stressful, and lead to extra fines or fees.
Even if you aren’t worried about being audited, you should still learn how to file a tax return for your overall financial wellness. When you file your tax return, online or in person, you’re likely to get a refund.
A tax refund occurs when the automatic withholding from your paycheck is too high. Once a year, you can submit your total amount of income matched up with your specific personal circumstances. This allows the IRS (and you) to fix any errors that were made throughout the year.
Tax returns can also include “deductions” as part of your refund. A deduction is an amount of money that isn’t taxable. This can include donations to charity, work-related expenses, childcare, and some property and medical expenses.
The amount of deductions or automatically withheld pay determines your refund. Your tax refund can range from a couple hundred to a few thousand dollars. You can see why we consider learning how to file a tax return an important part of financial wellness! Your return can be used to pay down debt, make important purchases, or even start a new savings account.
On the path to financial wellness, every penny counts. Even without your refund, a key part of your wellness journey is knowing how your money works. The more you know about taxes, the more you know about your money. The more you know about your money, the more you can take charge of your financial situation.
Getting Ready to File Tax Returns
When learning how to file tax returns, preparation is key. Filing your taxes is all about getting the right documents in the same place at the same time. Anyone who has been to the DMV knows how frustrating it is to get there and learn there’s one document you’re missing. You end up having to start all over again and (if you’re anything like me) make multiple trips before you get it right.
To avoid having the same thing happen with your taxes, make sure you’re well-prepared before you even begin. Otherwise, you’ll end up starting and stopping and your taxes could take you days or weeks.
Once you know how to file tax returns, you’ll get better and better at storing relevant information in a convenient place. This means that as soon as something relevant comes to you at any point in the year, you’ll place it in a designated place so you don’t have to search for it this time next year.
There are three main categories of things to have prepared before you file.
Learning how to file your taxes is overwhelming, so we’ll keep it short here. For more in-depth info, check out the IRS’s website. Their search function can help you find the answer to any specific questions you have. Each person’s tax situation is unique and this list is by no means exhaustive, but it’ll get you started!
When you’re navigating how to file a tax return, it’s a relief to know that the first step is easy as pie!
You’ll need to have all your personal details for the tax year. This includes information like:
- Your name and social security number
- Your age
- Where you lived
- Where you worked
- Your marital status
- Any children or other dependants you cared for during the year
All this information helps the IRS identify you as you. This means you’ll get your tax return, not someone else’s. This info also helps determine how much you should owe on taxes and whether you’ll have any automatic deductions or credits, like the child tax credit.
Next on the list is income. The key thing to remember about income when you’re learning how to do your taxes is to report everything. Leaving off income that you made freelancing or at a part time job is a surefire way to get audited and hit with a fine.
You’ll usually have a form that will help you report your income accurately. These forms include:
These forms are all sent to you by your employer (or customer if you’re an independent contractor using a 1099), who has also send a copy to the IRS. This is why reporting everything is so important. If the IRS’s records from you and your employer don’t match, you’ll both be audited for it.
Most companies allow you to access these forms online. Chances are you don’t even need to wait for your paper copy to come in the mail. These forms are the most important part of filing your taxes, so make sure you have them before you even get started!
If you own an LLC or a sole proprietorship, things might be a little different. We’re talking about how to file tax returns here, though, so we’ll leave the ins and outs of small business finance to another article.
Finally, there’s your deduction details. The number of deductions you qualify for can vary, from one or two to dozens. Finding every deduction can be paralyzing, especially when you’re getting familiar with how to file tax returns. For our purposes, we’ll go over some of the most common deductions.
The most common deductions are:
- Charity deductions (you’ll want a written acknowledgement for gifts larger than $250)
- Medical and dental deductions (with some exceptions)
- Mortgages and some home improvements
As you learn more about how to file tax returns, you’ll find that this list is by no means exhaustive. You likely qualify for more deductions than this, since you can get deductions for the miles it takes to drive to work, state and local taxes you’ve paid, some insurance premiums, and much more.
For the person trying to file hassle-free, though, there’s no problem with keeping it simple. The important thing is to get all of your documentation in order. When your documentation is in order, filing a tax return is a breeze, whether that’s for your personal details, income details, or deduction details.
How to File Tax Returns Online
Believe it or not, the IRS has actually asked that taxpayers file accurate online returns, so you can get your money quicker. And it’s easy to see why! Filing online is faster and easier for you, the IRS, and the USPS. Add in the direct deposit options that filing online gives you and it’s no wonder 94% of tax returns were filed online last year.
So how can you file a tax return online?
First, make sure your information is accurate and easy to process. I know we’ve said this a few times now, but it’s truly crucial. Mistakes on your tax return make the process more difficult, delaying your return.
To ensure your return is accurate, double check your answers against every resource you can find. When you’re mastering how to file a tax return, remember that this isn’t a school test. You can check and double check your answers, and no one will bat an eye, not even the IRS.
In fact, the IRS has some great resources on their website, and you can use the search function for specific problems. You can also ask a tax expert. Many places you can file a tax return online have chat functions as part of their paid plan.
Once you’re sure your information is in order, filing tax returns online is as simple as picking a site you want to work with and inputting your information. Not sure where to start? We recommend TaxSlayer. They have some of the most affordable prices out there, and even their free plan lets you contact tax experts with any questions you have.
When you file a tax return online, you’re sure to beat the rush to in-person tax preparers and get your tax return in your hands in a cinch.
How to File Tax Returns for Free
More and more people are interested in learning how to file tax returns for free. It’s no surprise, as people who are working on their financial wellness know that there’s no reason to pay someone to do something you can do yourself.
Not everyone can file their own tax return, though, so here are some guidelines. These will help you figure out whether you can file your tax return for free, or whether it’s worth shelling out a couple bucks to work with an expert.
- Do you have any income besides your W-2?
- Do you have any dependants?
- Do you own property?
- Do you have any large deductions to claim?
- Did you use any government-funded programs this tax year, such as WIC, food stamps, or government-funded insurance?
If you answered yes to any of these questions, it’s best to ask for help.
You can still file your own tax return using forms available on the IRS’s website, but these things will make filing your taxes much more complex. Paying a little bit to have an expert on hand now will help you avoid larger fines later, and dodge the possibility of being audited all together.
If you didn’t answer yes to any of those questions, Congratulations! You’re in the perfect position to file your own tax return for free. Filing for free is a great way to file your taxes in a snap. You don’t need to wait for a tax expert to be available and you don’t need to collect too many documents.
There’s not much else to do when it comes to figuring out how to file tax returns for free on your own. Just plug in your info and you’re done!
Still Waiting for Your Tax Refund?
You’ve figured out how to file a tax return, you’ve done the paperwork… Now you just have to wait. When you have big plans for your tax return, waiting for it to come in is like waiting for water to boil.
The good news is that you aren’t being left high and dry to wonder when your return will hit your bank account. Most refunds will take about 21 days to process, according to the IRS’s estimate. Inaccurate, backdated, or incomplete information can take longer, but for simple returns, you can expect it within 21 days.
Besides being accurate, there’s one more thing you can do to make sure your refund gets to you as quickly as possible. Make sure you select a direct deposit rather than a paper check. Some people are nervous about giving their banking information out, but for tax returns it’s the quickest, easiest way to get your refund.
You can get more exact info by using the IRS’s Where’s My Refund? tool. You’ll need some specific information from your tax return to use this tool, but don’t worry. All you’ll need is your name, filing status, and the exact amount of your tax return.
While you’re still gathering information on how to file a tax return, make a note to write down the exact amount of your return. This way you can track exactly when your return will hit your bank account.
Have something time-sensitve that you need your tax return for? Many personal loan companies specifically help people advance their tax returns. With a personal loan or tax advance, you can get the money ahead of time and pay back the amount from your tax return.
While this isn’t a great idea if you’re hoping to put the money from your tax return into savings, it can help in other situations. For instance, if you have debt repayments that are past due and you need to pay them off.
Part of learning how to file a tax return is being prepared to wait. However, the sooner you file your tax return, online or in person, the sooner that money will come in, so don’t wait!
How to File Tax Returns: Simplify Tax Season
And that’s it! Filing a tax return may not be anyone’s dream, but it doesn’t have to be a nightmare. Preparing to file taxes is the most difficult part, and now that you know how to file a tax return, you can start making that easier and easier.
Filing your tax return is an important part of financial wellness, so way to go! You’ve made another step towards taking control of your money. Understanding your money is a huge part of managing well, and taxes are a big part of that.
Learning how to file a tax return empowers you to be more prepared next year. Being more prepared next year allows you to put one more aspect of financial wellness on autopilot. With tax returns getting more and more accessible, there’s really no reason to skip this important process.
In fact, you should lean into it! Embrace filing your tax return as part of your financial wellness. After you’re comfortable with filing your tax return, check back in with us here at Penny Calling Penny. We’ve got everything you need, from learning to budget to starting your latest side hustle and even dealing with debt. Welcome to your finanical future, we’re glad to be here!