How to File Taxes
Research whether you need to file., Determine how you need to file., Determine if you need to file as married or unmarried., Decide if you and your spouse should file jointly., Decide if you and your spouse should file separately., Determine if you...
Step-by-Step Guide
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Step 1: Research whether you need to file.
You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico, and you fall into any of the following categories:
Individuals in general
- As an individual U.S. citizen or resident, whether you must file a return depends on your gross income, your filing status, and your age.
Dependents
- Even if someone (such as your parents) can claim you as a dependent, you will still have to file a return if your gross income is over a certain amount.
Certain children under age 19 or full-time students
- If a child is under the age of 19 at the end of the tax year or was a full-time student under the age of 24, whose only income for that year was interest and dividends (essentially, if the child or student does not have a job), the parent can include the child or student’s income with the parent’s return.
If the parent decides to include the child’s “income” on his or her return, the child or student does not have to file a return.
To see the IRS filing requirements for most taxpayers in 2015 (for the 2014 tax year), look at IRS Publication 501 here. -
Step 2: Determine how you need to file.
One of the first things to determine in preparing your tax return is your filing status.
There are five possible filing statuses that you can choose from:
Single Married filing jointly Married filing separately Unmarried head of household Qualifying widow or widower with a dependent child , For federal tax purposes, a marriage means a legal union between “spouses.” You are considered “unmarried” if, on the last day of the tax year, you are unmarried or legally separated from your former spouse under a divorce or separate maintenance decree.
The law of your state governs whether you are married or legally separated.
You are considered married if you and your spouse meet any one of the following:
You are married and living together as husband and wife You are living together in a common law marriage that is recognized in the state where you now live or the state where the common law marriage began You are married and living apart, but are not legally separated under a decree of divorce or separate maintenance, You are separated under an interlocutory (not final) decree of divorce.
For purposes of filing a joint return, you are not considered divorced here. , On a joint return, you report your combined income and deduct your combined allowable expenses.
You can file a joint return even if you or your spouse do not have any income.
If you and your spouse decide to file together, your taxes may be lower than your combined tax for the other filing statuses.Your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to the other filing statuses.
However, married people who both earn approximately the same income may pay more taxes if they file a joint return than they would if they filed to “single” returns. , You can choose married filing separately if you are married.
This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax liability than filing a joint return.
However, if you file separately, you will usually pay more taxes than you would if you filed together., If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child.
To qualify as the head of household, you must meet all of the following requirements:
You are unmarried on the last day of the tax year You paid more than half the cost of keeping up a home for the year A “qualifying person” lived with you in the home for more than half the year (except for temporary absences such as school).
However, if the qualifying person is a dependent (such as your child), he or she does not have to live with you.
A qualifying individual is typically your child, but can also be a relative that lives in your home for whom you care.
If your spouse died during the tax year (and for two additional years following your spouse’s death) and you have a child, you can file as a qualifying widow(er). , If you are an employee, you should receive Form W-2 from your employer.
You will need the information from this form to prepare your return, and you should attach a copy of your W-2 to your return as well.
Your employer is required to provide or send your W-2 to you no later than January 31 of the tax year.If you do not receive your form by February 15, the IRS can help you get a copy by requesting the form from your employer.
When you request IRS help, be prepared to provide your name, address, and phone number; Social Security number; dates of your employment; and the employer’s name, address and phone number., If you received certain types of income, you may receive a Form 1099 instead of or in addition to a W-2.
For example, if you received taxable interest of $10 or greater, the payer is required to provide or send you a Form 1099 no later than January 31 of the tax year.If you do not receive a 1099 Form that you should have received by February 15, call the IRS for help. , There are certain personal records that you should keep for your own reference, even though the IRS does not require them unless there is some type of tax dispute.
Keeping these records will ensure that you can properly report your income and properly deduct your expenses on your tax return.
Additionally, if you get into a dispute with the IRS regarding the amount of taxes you paid or the refund amount you received, you can use your records as proof and support for your position.
In addition to W-2s and 10992, you should keep income verification records such as bank statements and brokerage statements.You should also keep various records of expenses, including sales slips, invoices, receipts, canceled checks or other proof of payment, and written communications from qualified charities.If you own a home, you should also keep several records associated with those costs, including closing statements, proof of payment, insurance records, and receipts for improvement costs.Other investment records you may need include brokerage statements, mutual fund statements, Form 2439, and receipts for collectibles., Three different IRS forms are available for filing your taxes.
You must use one of the following.Form 1040EZ Form 1040A Form 1040 , Form 1040EZ is the easiest to file, but you should be careful using this form if your income is close to the maximum level of $100,000.
You cannot claim itemized deductions on the 1040EZ.
The closer your income is to the maximum, the more you risk overpaying taxes due to not claiming deductions.
You can use this form if all of the following conditions apply:
Your filing status is single or married filing jointly.
You (and your spouse if applicable) were under age 65 and not blind at the end of the current tax year.
You do not claim any dependents.
Your taxable income is less than $100,000.
Your income is only from wages, salaries, tips, unemployment compensation, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
You do not claim any adjustment income, such as a deduction for IRA contributions or student loan interest.
You do not claim any credits other than the earned income credit.
You do not owe any household employment taxes on wages you paid to a household employee.
If you earned tips, they are included in boxes 5 & 7 of your Form W-2.
You are not a debtor in a chapter 11 bankruptcy case. , Form 1040A lets you report the most retirement income, including pension and annuity payments, taxable social security and railroad retirement benefits, and payments from your IRA.
If you do not qualify to use the Form 1040EZ, you may be able to use the Form 1040A if your income is under $100,000, and you claim income adjustments for only IRA deductions and/or student loan interest deductions.You still cannot claim itemized deductions on Form 1040A.
If you have deductions that can be itemized, you may be better off filing a Form
1040., If you cannot use Form 1040EZ or 1040A, you must use Form
1040.
You can use Form 1040 to report all types of income, deductions, and credits.
You may pay less tax by filing Form 1040 because you can itemize deductions. you can also get some adjustments to income that you cannot get on a Form 1040A or a Form 1040EZ., Depending on the form you use to file your return and the items on your return, you may have to complete additional “schedules” or forms and attach them to your return.Note that there are no additional schedules to file with Form 1040EZ if that’s the form for which you qualify.If you file using a Form 1040A or a Form 1040, any additional schedules will depend on your particular situation. , If you elect to itemize your deductions rather than claim the standard deduction, then you must prepare a Schedule A and attach it to your Form
1040.
Some of the itemized deductions listed on Schedule A include medical and dental expenses, various state taxes, mortgage interest, charitable contributions, and work-related expenses.If your Schedule A total exceeds the standard deduction, you are typically better off itemizing your deductions., Schedule B is an income schedule that requires you to separately list the sources of interest and dividend payments you receive during the year.You can use Schedule B with both Forms 1040 and 1040A.
Preparation of the schedule is only necessary when your interest or dividend income exceeds the IRS threshold for the year, which was $1,500 in
2014.For example, if you only earn $200 of bank interest this year, you must include this amount in your taxable income, but preparing a Schedule B is not necessary. , Schedules C and C-EZ are forms that you use to report self-employment income.
Both forms separately report your business earnings and deductions to arrive at your net business profit or loss, which is then added to your other income on Form
1040.If you have a single business with simple accounting that meets IRS qualifications, you can use the shorter Schedule C-EZ rather than Schedule C., If you sell a capital asset during the year, then you must report it on a Schedule D attachment to your tax return.
Capital assets transactions commonly report the gains and losses when you sell stocks, but they can include any other property you sell during the year, such as your home or car.The form separates the transactions into short-term and long-term transactions depending on whether you own the property for more than one year or not.Your short-term capital gains are taxed at the same rate as your other income, but your long-term gains are taxed at lower rates., Schedule EIC is where you report your qualifications for claiming the earned income tax credit.
The earned income tax credit is a refundable tax credit you can claim if you have qualifying children, and your income falls below a certain level.
You can use Schedule EIC for both Forms 1040 and 1040A., If you are self-employed, you are responsible for paying Social Security tax on your earnings since an employer is not withholding it for you.
You compute the amount of your self-employment tax on Schedule SE. -
Step 3: Determine if you need to file as married or unmarried.
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Step 4: Decide if you and your spouse should file jointly.
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Step 5: Decide if you and your spouse should file separately.
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Step 6: Determine if you qualify as a head of household or a widow(er) with a dependent child.
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Step 7: Gather all Form W-2s.
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Step 8: Gather any Form 1099s
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Step 9: if applicable.
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Step 10: Gather additional financial records.
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Step 11: Familiarize yourself with the different filing forms.
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Step 12: Determine if you need Form 1040EZ.
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Step 13: Determine if you need Form 1040A.
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Step 14: Determine if you need Form 1040.
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Step 15: Familiarize yourself with other “schedules” you may have to attach to your filing form.
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Step 16: Attach a Schedule A if you wish to itemize your deductions.
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Step 17: Determine if you should file a Schedule B.
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Step 18: Attach Schedules C or C-EZ for self-employment income.
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Step 19: Attach a Schedule D for capital gains.
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Step 20: Attach Schedule EIC for the earned income tax credit.
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Step 21: Attach a Schedule SE for non-withheld Social Security taxes.
Detailed Guide
You must file a federal income tax return if you are a citizen or resident of the United States or a resident of Puerto Rico, and you fall into any of the following categories:
Individuals in general
- As an individual U.S. citizen or resident, whether you must file a return depends on your gross income, your filing status, and your age.
Dependents
- Even if someone (such as your parents) can claim you as a dependent, you will still have to file a return if your gross income is over a certain amount.
Certain children under age 19 or full-time students
- If a child is under the age of 19 at the end of the tax year or was a full-time student under the age of 24, whose only income for that year was interest and dividends (essentially, if the child or student does not have a job), the parent can include the child or student’s income with the parent’s return.
If the parent decides to include the child’s “income” on his or her return, the child or student does not have to file a return.
To see the IRS filing requirements for most taxpayers in 2015 (for the 2014 tax year), look at IRS Publication 501 here.
One of the first things to determine in preparing your tax return is your filing status.
There are five possible filing statuses that you can choose from:
Single Married filing jointly Married filing separately Unmarried head of household Qualifying widow or widower with a dependent child , For federal tax purposes, a marriage means a legal union between “spouses.” You are considered “unmarried” if, on the last day of the tax year, you are unmarried or legally separated from your former spouse under a divorce or separate maintenance decree.
The law of your state governs whether you are married or legally separated.
You are considered married if you and your spouse meet any one of the following:
You are married and living together as husband and wife You are living together in a common law marriage that is recognized in the state where you now live or the state where the common law marriage began You are married and living apart, but are not legally separated under a decree of divorce or separate maintenance, You are separated under an interlocutory (not final) decree of divorce.
For purposes of filing a joint return, you are not considered divorced here. , On a joint return, you report your combined income and deduct your combined allowable expenses.
You can file a joint return even if you or your spouse do not have any income.
If you and your spouse decide to file together, your taxes may be lower than your combined tax for the other filing statuses.Your standard deduction (if you do not itemize deductions) may be higher, and you may qualify for tax benefits that do not apply to the other filing statuses.
However, married people who both earn approximately the same income may pay more taxes if they file a joint return than they would if they filed to “single” returns. , You can choose married filing separately if you are married.
This filing status may benefit you if you want to be responsible only for your own tax or if it results in less tax liability than filing a joint return.
However, if you file separately, you will usually pay more taxes than you would if you filed together., If you are considered unmarried, you may be able to file as a head of household or as a qualifying widow(er) with a dependent child.
To qualify as the head of household, you must meet all of the following requirements:
You are unmarried on the last day of the tax year You paid more than half the cost of keeping up a home for the year A “qualifying person” lived with you in the home for more than half the year (except for temporary absences such as school).
However, if the qualifying person is a dependent (such as your child), he or she does not have to live with you.
A qualifying individual is typically your child, but can also be a relative that lives in your home for whom you care.
If your spouse died during the tax year (and for two additional years following your spouse’s death) and you have a child, you can file as a qualifying widow(er). , If you are an employee, you should receive Form W-2 from your employer.
You will need the information from this form to prepare your return, and you should attach a copy of your W-2 to your return as well.
Your employer is required to provide or send your W-2 to you no later than January 31 of the tax year.If you do not receive your form by February 15, the IRS can help you get a copy by requesting the form from your employer.
When you request IRS help, be prepared to provide your name, address, and phone number; Social Security number; dates of your employment; and the employer’s name, address and phone number., If you received certain types of income, you may receive a Form 1099 instead of or in addition to a W-2.
For example, if you received taxable interest of $10 or greater, the payer is required to provide or send you a Form 1099 no later than January 31 of the tax year.If you do not receive a 1099 Form that you should have received by February 15, call the IRS for help. , There are certain personal records that you should keep for your own reference, even though the IRS does not require them unless there is some type of tax dispute.
Keeping these records will ensure that you can properly report your income and properly deduct your expenses on your tax return.
Additionally, if you get into a dispute with the IRS regarding the amount of taxes you paid or the refund amount you received, you can use your records as proof and support for your position.
In addition to W-2s and 10992, you should keep income verification records such as bank statements and brokerage statements.You should also keep various records of expenses, including sales slips, invoices, receipts, canceled checks or other proof of payment, and written communications from qualified charities.If you own a home, you should also keep several records associated with those costs, including closing statements, proof of payment, insurance records, and receipts for improvement costs.Other investment records you may need include brokerage statements, mutual fund statements, Form 2439, and receipts for collectibles., Three different IRS forms are available for filing your taxes.
You must use one of the following.Form 1040EZ Form 1040A Form 1040 , Form 1040EZ is the easiest to file, but you should be careful using this form if your income is close to the maximum level of $100,000.
You cannot claim itemized deductions on the 1040EZ.
The closer your income is to the maximum, the more you risk overpaying taxes due to not claiming deductions.
You can use this form if all of the following conditions apply:
Your filing status is single or married filing jointly.
You (and your spouse if applicable) were under age 65 and not blind at the end of the current tax year.
You do not claim any dependents.
Your taxable income is less than $100,000.
Your income is only from wages, salaries, tips, unemployment compensation, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
You do not claim any adjustment income, such as a deduction for IRA contributions or student loan interest.
You do not claim any credits other than the earned income credit.
You do not owe any household employment taxes on wages you paid to a household employee.
If you earned tips, they are included in boxes 5 & 7 of your Form W-2.
You are not a debtor in a chapter 11 bankruptcy case. , Form 1040A lets you report the most retirement income, including pension and annuity payments, taxable social security and railroad retirement benefits, and payments from your IRA.
If you do not qualify to use the Form 1040EZ, you may be able to use the Form 1040A if your income is under $100,000, and you claim income adjustments for only IRA deductions and/or student loan interest deductions.You still cannot claim itemized deductions on Form 1040A.
If you have deductions that can be itemized, you may be better off filing a Form
1040., If you cannot use Form 1040EZ or 1040A, you must use Form
1040.
You can use Form 1040 to report all types of income, deductions, and credits.
You may pay less tax by filing Form 1040 because you can itemize deductions. you can also get some adjustments to income that you cannot get on a Form 1040A or a Form 1040EZ., Depending on the form you use to file your return and the items on your return, you may have to complete additional “schedules” or forms and attach them to your return.Note that there are no additional schedules to file with Form 1040EZ if that’s the form for which you qualify.If you file using a Form 1040A or a Form 1040, any additional schedules will depend on your particular situation. , If you elect to itemize your deductions rather than claim the standard deduction, then you must prepare a Schedule A and attach it to your Form
1040.
Some of the itemized deductions listed on Schedule A include medical and dental expenses, various state taxes, mortgage interest, charitable contributions, and work-related expenses.If your Schedule A total exceeds the standard deduction, you are typically better off itemizing your deductions., Schedule B is an income schedule that requires you to separately list the sources of interest and dividend payments you receive during the year.You can use Schedule B with both Forms 1040 and 1040A.
Preparation of the schedule is only necessary when your interest or dividend income exceeds the IRS threshold for the year, which was $1,500 in
2014.For example, if you only earn $200 of bank interest this year, you must include this amount in your taxable income, but preparing a Schedule B is not necessary. , Schedules C and C-EZ are forms that you use to report self-employment income.
Both forms separately report your business earnings and deductions to arrive at your net business profit or loss, which is then added to your other income on Form
1040.If you have a single business with simple accounting that meets IRS qualifications, you can use the shorter Schedule C-EZ rather than Schedule C., If you sell a capital asset during the year, then you must report it on a Schedule D attachment to your tax return.
Capital assets transactions commonly report the gains and losses when you sell stocks, but they can include any other property you sell during the year, such as your home or car.The form separates the transactions into short-term and long-term transactions depending on whether you own the property for more than one year or not.Your short-term capital gains are taxed at the same rate as your other income, but your long-term gains are taxed at lower rates., Schedule EIC is where you report your qualifications for claiming the earned income tax credit.
The earned income tax credit is a refundable tax credit you can claim if you have qualifying children, and your income falls below a certain level.
You can use Schedule EIC for both Forms 1040 and 1040A., If you are self-employed, you are responsible for paying Social Security tax on your earnings since an employer is not withholding it for you.
You compute the amount of your self-employment tax on Schedule SE.
About the Author
Anna Johnson
Anna Johnson is an experienced writer with over 5 years of expertise in museums libraries. Passionate about sharing practical knowledge, Anna creates easy-to-follow guides that help readers achieve their goals.
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