How to File Your Taxes

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How to File Your Taxes

As tax season approaches, you may be wondering what alternatives you have for completing a tax return. We must first handle a handful of issues. When does tax season begin? What information do you need to collect before filing your taxes?

Key Takeaways

  • You may do your taxes yourself, utilize online tax preparation software, or pay a professional.
  • Whatever method you choose, you will need to have specific information on hand in order to prepare your return.
  • Most filers need a W-2 form from their employment as well as one or more 1099 forms for “miscellaneous” income such as side jobs and interest payments. You should also get documentation of any retirement account contributions. All of them should arrive in January.

When Is the 2022 Tax Season?

The former tax year’s “tax season” occurs in the early months of the following year. The Internal Revenue Service (IRS) will begin collecting and processing returns for the 2021 tax year on January 24, 2022. Also, 2021 tax returns will be due on April 18, 2022, which is one day later owing to the District of Columbia’s Emancipation Day holiday on April 15th. Due to the Patriots’ Day holiday in both states, the deadline to file in Maine and Massachusetts is April 19, 2022.

Information and Forms You Need to File Taxes

There are some materials you must have on hand regardless of the method you choose to do your taxes.

You and your dependents must be identified using your Social Security number. You must also establish your filing status, taxable income, tax paid, and any deductions and credits for which you may be qualified. This means you’ll have to wait until the end of January to obtain all of your W-2s, 1099 forms, and other documents before submitting your taxes.

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Here’s what you’ll need to have handy:

  • Names, birth dates, and Social Security numbers for you, your spouse, and any dependents
  • Form W-2, which you get from your employer and which details your earnings and taxes paid on your behalf.
  • Form 1099-NEC (non-employee pay), which you should get if you earned more than $600 while working for a non-employer organization, as a contract worker, or as a side hustler.
  • Form 1099-MISC, which you’d get if you received more than $600 in other income, such as rent, prizes, fishing boat revenues, or crop insurance payouts.
  • If you received more than $10 in interest during the tax year, you would get Form 1099-INT from a bank or other financial institution.
  • A record of your contributions to your retirement account

If you want to itemize your taxes rather than taking the standard deduction, the following documents are often required:

  • Property taxes and mortgage interest paid: This information is normally included on a Form 1098, Mortgage Interest Statement, which you will receive from your mortgage lender. If you do not have a mortgage or an escrow account to pay your property taxes, you must maintain a separate record of your property tax payments.
  • State and local taxes paid: If you work for an employer, this is on your W-2 form. If you work as an independent contractor, you must keep track of the estimated tax payments you make during the year.
  • Charitable contributions are a tax-deductible cost; however, the amount you may claim is usually restricted to a percentage of your adjusted gross income (AGI).
  • Be mindful that if you pay eligible educational expenditures with a student loan, you must claim them in the year the expenses are incurred, not in the year the loan funds are received or returned.
  • Unreimbursed medical expenditures: For tax year 2021, you may deduct the amount of unreimbursed medical expenses that exceed 7.5% of your AGI (the threshold in any regular tax year is normally between 7.5% and 10% of AGI).
  • Federal and state tax returns from the previous year
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How to Prepare Your Taxes

There are various methods for preparing your taxes. A tax expert, tax software, and filling out the papers yourself are the three basic alternatives for tax preparation.

Do It Yourself

You may prepare your own federal taxes by downloading and printing the documents from the IRS website and mailing the return along with a cheque if you owe money.

Another alternative is to complete the paperwork online and send the return with a credit card payment. Using the Forms, Instructions, and Publications Search feature, you may find all federal tax forms.

State income tax forms are normally available on the official website of your state.

There are no charges or fees associated with submitting your own taxes. Because it encourages you to document your transactions, earnings, and spending, it is a wonderful approach to learn more about your financial condition.

Most persons who physically file their taxes have a simple tax status, an unaltered tax situation, or a personal interest in the topic. If you have the necessary paperwork on hand, it may be completed in minutes.

Use a Tax Professional

A tax specialist is a preferable alternative for anybody who has a difficult financial position or lacks trust in their money. Capable tax specialists can assist you in minimizing your tax liability and maximizing your deductions. Using a tax expert may be cost effective.

Tax Software Vs a CPA: Which Is Right For You?

Use Tax Preparation Software

Using tax preparation software for your federal and state forms is a middle ground between doing your own taxes and paying a professional. You enter your own data, but the program guides you through the procedure step by step.

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Professional assistance may be obtained online, via phone, or both.

The greatest of these apps will automatically fill in your prior year’s information if you use it for more than one year.

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