Tax Filing 101: How to File Taxes

Do I need to file taxes?

The need to file taxes is based on many factors such as income, filing status, age, and whether or not you are or may claimed as a dependent by someone else on their taxes. Under the tax laws, a dependent is someone who, based on their relationship with another person, allows that person to claim a tax deduction or credit. Children or relatives that you support are a few examples.

Understanding whether you need to file taxes can be confusing. The IRS has an Interactive Tax Assistant tool to help you understand if and why you need to file taxes by simply answering a few questions. Even if you are not required by law to file your taxes, you may choose to do so if you had money withheld from your paycheck or are eligible for a credit refund. A Tax Pro can help you determine what your next steps should be and what action you might need to take in order to file your federal income taxes.

Understanding tax brackets and how your taxes are calculated

Choose the right filing status

The IRS has five filing status options for taxpayers required to file income taxes. You can file as single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse. Learn more about the implications of different filing statuses and how to choose the correct one for you in our guide on tax filing status. Choosing the correct status can save you big dollars at tax time, but choosing the wrong one can cost you!

Gather your tax information and documents needed to file 

When preparing your taxes, there are important documents needed to ensure you are doing it correctly. You will need personal documents, such as your Social Security card, and a current government issued photo ID. A copy of last year’s federal and state tax returns could also be a big help. In addition, you will need documents specific to your income, such as your Forms W-2 from each of your employers or Forms 1099-NEC or 1099-K from your self-employment or side gig. If you didn’t receive any 1099 Forms from your self-employment or side gig, make sure you have a record of all the income paid for the year.

You will also need documents identifying applicable deductions from the tax year, such as receipts from charitable donations you made, medical or educational expenses, property taxes, or retirement contributions. There are many more documents you may need to have at hand when preparing your taxes. Luckily, Jackson Hewitt Tax Service has a customized tax document checklist to ensure you know exactly what you need when preparing to file your taxes.

Understand which tax forms you’ll need to file

The IRS Form 1040 is the standard federal tax income form used to report your income and tax deductions, calculate your taxes, and refund or balance due for the year. There are two different types, Form 1040 and Form 1040-SR. Form 1040-SR is specifically designed for people 65 and over to make filing easier. Both forms calculate your taxable income and tax liability, and determine whether you are due a tax refund or owe taxes.

There are three schedules that may need to be included with the Form 1040 depending on your tax situation. Schedule 1 is necessary if you have had any additional income or adjustments to your income. This would include business income, rental income, and student loan interest, just to name a few.  Schedule 2 needs to be filed if you owe any additional taxes, such as the alternative minimum tax, self-employment tax, or household employment tax. Last, Schedule 3 is necessary when you have additional credits and payments. For example, if you want to claim a credit for a child and/or dependent care, education credits, saver’s credit, and more, Schedule 3 is required.

Determine how you want to file taxes

There are a few options to choose from when deciding how to file your tax return with the IRS. The old-fashioned filing method is to prepare your return with a pencil and calculator and mail it to the IRS, but there are other alternatives that make filing much easier.

File your taxes online

Jackson Hewitt makes preparing and filing taxes easy by providing a valuable online resource. Simply create an account and follow the step-by-step guide to prepare your return. Then, try filing online with Jackson Hewitt Online easy to use do-it-yourself software.

File with a Tax Professional

Another way to make filing easy is to use a Tax Pro. Jackson Hewitt has skilled Tax Pros available at all locations to help prepare and file your taxes when the time is ready. You can also upload your relevant tax documents online prior to your appointment at an office.

Or, you can drop off your documents at the nearest Jackson Hewitt location. Find your nearest Jackson Hewitt drop-off location. All of our locations practice safe, no-contact tax return preparation – to keep us all safe during these difficult times.

Virtual Tax Preparation

Even more convenient, you are now able to schedule a virtual visit with a Jackson Hewitt Tax Pro. This means you get all of the confidence of having a Tax Pro prepare and file your taxes from the safety and comfort of your own home. Learn more about Online Tax Pro or schedule an appointment today.

All Jackson Hewitt tax filing options offer electronic filing to help protect your tax return, documents and personal information.

Determine which credits and deductions you may be able to take

Knowing what credits and deductions you are eligible for will help when gathering the proper documentation needed to prepare and file your taxes. A tax deduction will reduce your taxable income dollar for dollar, while a tax credit will reduce your taxes dollar for dollar.

For example, if you contribute to a retirement fund and are not a dependent or full-time student, you may be eligible for a Saver’s Credit of up to $1,000. With student loan interest, you can deduct up to $2,500 in interest you paid on your student loans. Charitable deductions are common and consist of the amount of cash and the value of property you donated to qualifying organizations during the year.

If you are self-employed, you have the opportunity to claim your self-employment expenses, like your home office if you have one, which will reduce your taxable income.

Itemized vs. Standard Deductions

Itemized deductions are certain expenses the IRS allows you to deduct from your income to determine your true taxable income. There are very specific circumstances and limits when itemizing deductions, and since every taxpayer is different, there is no single guide to understanding whether to itemize or take the standard deduction. But the general rule is easy—you get to pick the bigger deduction of the two: either the standard deduction that all taxpayers are entitled to, or to itemize deductions, if larger.

The standard deduction depends on your filing status.  Possible itemized deductions include medical expenses, certain taxes, mortgage interest, charitable contributions, casualty loss in a federally declared disaster area, as well as other miscellaneous deductions. To help determine whether itemizing deductions or taking the standard deduction is right for you, read our brief guide on itemized deductions.

Pay attention to tax deadlines

It is crucial to pay attention to tax deadlines to avoid late fees and trouble with the IRS. Tax Day is April 15th, and if it happens to fall on a holiday or weekend, the deadline is moved to the next business day. And if you receive all your tax documentation early, you may file your tax return as early as January, so there is no real need to wait until the deadline to file.

If you are unable to file your taxes by Tax Day, you have options. Filing a tax extension can give you up to six additional months to file your taxes. But if you file your taxes on time and can’t pay, a tax extension does not delay the payment due date. If you do not pay your balance by the April 15th deadline, interest and fees will begin to accrue.

Settle your taxes with the IRS

Pay the IRS if you owe taxes

If you owe taxes to the IRS, there are many ways to pay. You can pay directly from your bank account with no transaction fee, as well as by making an electronic payment, wire transfer, credit card payment, or sending a check by mail.

If you are unable to pay, you can set up an installment agreement and pay as much as you can each month. There are costs associated with this and interest and penalties will still accrue. Paying as much as you can by April 15th and paying the remainder off monthly is better than not paying at all. If you have tax debt from prior years, learn more about how Jackson Hewitt can help.

Get your refund

Once you complete your tax return, you may realize that you are eligible for a refund. You have a few different options for receiving your refund, including a mailed check, direct deposit, or a savings bond from the Treasury Department. But the fastest and safest way to receive your tax refund is a direct deposit into your bank account.

To track your refund, visit the Where's My Refund on the IRS website. Or, if you filed your return with Jackson Hewitt, you can also track your refund with MyJH.

Keep your records

Be sure to keep records of your tax return and related documentation for at least seven years! Since IRS may be able to go back to the last seven years, Jackson Hewitt recommends you keep your records electronically for seven years.

It might help prepare future tax returns and will make it easier if you need to file an amended return or get a letter or notice from the IRS. Worried about getting audited by the IRS? Read our article on what to do if you are audited.  

About the Author

Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

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