Filing your taxes doesn’t have to be hard. There are 3 ways for you to successfully file your taxes. If you start one process, and realize that it is simply not working for you, switch to another one.
Your ability to do your taxes yourself, is not based on how much you make. Your income does not make your taxes difficult to maneuver through. Your taxes can be complicated depending on how you’ve made your money in throughout the past year, and other things going on in life. If you own a home, own a business, are enrolled in school, investments, are an in-home employee, etc. you may have some additional issues with trying to file your taxes yourself.
How Can I File My Taxes?
- By hand
- Through a certified tax software
- Hire a tax professional
How do I Know What Tax Form I Need to File My Taxes?
Use form 1040 if you:
- Have taxable income greater than $100,000
- Have a certain type of income (shareholder in an S corporation, self-employment income, unreported tips, dividends from insurance policies, or beneficiary of an estate/trust)
- Owe household employment taxes
- Itemize deductions or can claim certain tax credits/adjustments to income
Use form 1040A if you:
- Have taxable income less than $100,000
- Have income from wages, salaries, tips, interest, capital gain distributions, taxable scholarships/grants, IRAs, taxable social security, etc.
- Do not itemize deductions
- Do not have an alternative minimum tax adjustment on stocks
- Can only claim IRA deductions, student loan interest deductions, tuition/fees deductions, and educator expenses deductions as adjustments to income
Use form 1040EZ if you:
- Have taxable income less than $100,000
- File as single, or married filing jointly
- Claim no dependents
- Claim no adjustments to income
- Only claim Earned Income Credit (EIC)
- Have income from wages, salaries, tips, unemployment, taxable scholarships/grants, and taxable interest less than $1,500
- Are not in a Chapter 11 bankruptcy case filed after 10/16/2005
- Don’t owe any household employment taxes
How Long Does it Take to File?
There is not a set amount of hours that you have to file your taxes. Depending on your adjustments and claims, you can spend more than a few hours on the entire process. You will need to write everything in, or plug everything in, which is a tedious process. Online tax software will help to decrease the time it’ll take you to file manually, and will make most of the calculations for you. But you should at least set aside 3 hours to file via tax software, and more than that if you’re filing manually. If you decide to have a professional file your taxes for you, time will still need to be allotted. They will probably not take as long, because this is what they do for a living.
How Much Does it Cost to File My Taxes?
To file by hand the cost is free. You can get the paperwork from your local library or post office. They are also posted on the IRS website. There will be an instruction sheet on how to properly fill out the forms in the package. You will, however, need to pay for postage costs to send your documents.
To file your taxes via an online tax service, there are generally fees associated with the service. These services generally offer 2 packages: simple and advanced. There is a price difference between the two options. The simple version will typically cost up to $50. The advanced version is usually more than $50. Most of these services will tell you what you will get back on your state and federal returns after you click submit on their forms.
To file your taxes through a hired professional tax preparer, it will typically cost you $100, or more anywhere you go.
What is the Difference between State and Federal Taxes?
The federal government taxes your income at rates between 0- 39.6%, across the 7 different tax brackets. Most citizens have their taxes withheld, meaning that the government takes the percentage out of each check. If the government taxes you too much throughout the year, you will receive a tax return. If the government doesn’t take enough, you will owe.
State tax rates are determined by each individual state. You will need to look up the rate and application in your personal state. However, there are some states that do not have taxes: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
When are Taxes Due?
You generally have to file your taxes by April 15th each year. If that day happens to fall on a Sunday or a National holiday, that day is moved to the next appropriate day.
When Will I get my Tax Refund Back?
If there is an issue with your filing, your refund can take longer to be issued to you. For instance, if your paperwork is incomplete, your math is wrong, your social security number doesn’t match, you filed too early or too late, you made an amendment, your direct deposit information is wrong, or you filed via a paper application, there is a chance that your tax refund can be delayed. Generally the IRS processes and issues tax refunds within 21 days.
The process to filing your taxes should be just a little easier for you now. If it is not, do some more research, and take in all of the advice you possibly can.