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Benjamin Franklin is often roughly quoted as saying, “the only sure things in life are death and taxes.” If you live or earn income in the United States, you are most likely subject to federal income tax and typically must file a tax return. The Internal Revenue Service (IRS) is the government agency that is responsible for overseeing income taxes. 

A tax return is paperwork you file to self-report how much money you have earned so that the government can tax it. If you have had more money withheld from your paycheck than what you owe, you may get a tax refund. You may also be able to claim deductions that reduce the amount of tax you owe. 

Different kinds of income are taxed at different rates. For example, income from salary, wages and tips is usually taxed at a higher rate than income from the sale of investments, called the capital gains tax rate. Once you account for the different kinds of income you have and for your deductions, you can figure out your taxable income. Your income determines your tax bracket, which is the percentage of your taxable income that you will be required to pay.

Depending on your tax situation, you may need to gather multiple forms and schedules and may consider hiring a professional tax preparer to assist you. If your tax situation is complex and you need help, the IRS provides free taxpayer assistance, both online and in person. You can also estimate your tax liability with tax calc tools online.

Do I Have to File a Tax Return?

It may be surprising to learn that not everyone files a federal income tax return. Generally, you only need to file a tax return if your gross income is above a certain amount, which depends on your age and your filing status. 

However, even if you are not required to file a tax return, you may still choose to do so if it benefits you. Filing a tax return can grant you access to tax breaks and credits, such as the Earned Income Tax Credit, Child Tax Credit, American Opportunity Tax Credit and Health Coverage Tax Credit.

Still not sure if you need to file a tax return? You can use the Interactive Tax Assistant provided by the IRS to help you decide.

How Do I Choose My Filing Status?

There are several filing statuses you can choose from: single, married filing jointly, married filing separately, head of household and qualifying widow(er) with dependent child. The deductions and tax credits you may be able to claim depend largely on your filing status. 

Your filing status is a statement about your living situation on December 31st of the tax year. So, if you started the year married and then got divorced, you cannot file as “married” for that year. 

Documents and Information Needed to File a Tax Return

Around January or February, you’ll likely start receiving tax documents from employers. If you have a traditional job (in other words, are employed by a business or company that withholds taxes from your paychecks), you’ll receive a W-2 form. If you are an independent contractor (you control your own hours, pay, and services), you’ll get 1099 forms from each company that pays you for your work. You may also get an Affordable Health Care statement that shows any subsidies you may have received for healthcare.

Filing a tax return also requires you to provide information about each family member who lives with you or who you claim as a dependent, including dates of birth and Social Security numbers. You may decide to provide your bank routing and account numbers for direct deposit if you think you will be getting a tax refund. 

If you plan to itemize (list out) your deductions instead of taking the standard deduction, it may help to have records relating to each deduction you plan to claim, such as medical and dental expense receipts, tuition, daycare, mortgage interest statements, and property tax records. 

After gathering your documents, you can begin to file your tax return. The main tax form is IRS Form 1040, though there are other specialized versions of it. Seniors can use the large-print 1040-SR, while nonresident aliens can use 1040-NR. Depending on your deductions or your type of income, you may need to file additional documents, called schedules. 

Reducing the Amount of Taxes Due with Tax Credits and Deductions

The government offers taxpayers the ability to reduce their tax liability with tax credits. An example of this is the Adoption Credit for people who pay expenses associated with adopting a child. Likewise, the Child and Dependent Care Tax Credit is for taxpayers who support minor children, grandchildren, or disabled family members.

You can also reduce your payable tax with tax deductions. You have a choice of either using the standard deduction, which is a fixed amount dependent on your filing status, or itemizing your deductions. Using the standard deduction is, in most cases, easier because it requires less time and paperwork.

However, some people end up owing less in taxes when they itemize their deductions, so for them, itemizing may be best. Individuals who give a lot of charitable donations or pay high property tax are examples of taxpayers who might benefit from itemized deductions.

Ways to File Your Taxes

Filing a federal income tax return means sending all of this information and any supporting documentation to the IRS, either by mail or online. Here are your options:

  • By Mail
    • Gather the proper tax forms, fill them in by hand, sign them and send them to the IRS by mail. You can do this whether you do your taxes:
      • On your own,
      • With the help of a paid tax professional, or
      • With the help of a volunteer at the Taxpayer Assistance Center.
  • Online
    • You can use IRS Free File, an online free tax filing service that can be either guided online tax preparation at an IRS partner site (only if your adjusted gross income is $73,000 or less) or Free File electronic fillable forms. 
    • You can also use a third-party online tax preparation software, such as TurboTax or TaxAct. Calculate your taxes online and then file electronically or print and mail your return.
    • You can use a professional accountant or tax preparer to fill out and file all the necessary forms.

What Happens After I File?

After you file your income tax return, you may end up owing money to the IRS. You can pay your taxes online with IRS Direct Pay, or you can include a check with your paper tax return. If you have a business, you can pay your taxes using the Electronic Federal Tax Payment System (EFTPS).

If you are due a refund from the IRS, the quickest way to receive your payment is to use direct deposit. If you do not want to use direct deposit or do not have a bank account, you can elect to receive a check in the mail.

Learn Tips To File Your Tax Returns With Our Guide

Learn How To Apply For Government Assistance Online With Our Guide