Want to know how to do your taxes yourself? Some people feel confident about doing their taxes themselves, while others need the assistance of a professional accountant. Although the US tax code has become increasingly complicated, technological advancements have made filing and paying your taxes easier than ever before. If you are up for the challenge, here are some tips for doing your taxes by yourself.
1.) Decide Whether to Do Your Taxes Manually or Electronically
Despite technological advancements, many Americans still prefer to do their taxes manually. The downside of doing your taxes manually is that it can be extremely time-consuming. Consider using tax preparation software to make preparation easier and gain a better understanding of which credits and deductions you are qualified to receive. The IRS encourages e-filing because it is faster and easier to verify.
2.) Determine Which Forms to File
There are many different forms you may have to file, depending on your situation. Most employees only need to file a 1040 form. If you are an independent contractor or sole proprietor, you will also need to file a Schedule C or Schedule C-EZ. If you are a parent, student, retiree or military member, there may be additional forms that you can fill out to apply certain credits and deduct certain expenses.
3.) Gather Your Records
It will be easier to prepare your tax return if you gather all of your documents in advance and keep them organized. Some documents and information you will need include the following:
- Proof of identification
- Social Security Numbers (Your own, as well as those of your spouse and dependents.)
- Receipts to prove certain payments or purchases
- Wages and earnings statements (W-2, 1099, etc.)
- A copy of last year’s tax return
- Bank routing and account numbers
- Receipts for donations to charity
- The amount you paid for childcare and your childcare provider’s tax identification number
If you plan to do your taxes manually, download forms from the IRS website. You can also visit the tax assistance center nearest to you to pick up IRS forms and publications.
4. Calculate Your Income from the Previous Year
Calculate your total wages, salaries, and tips from the previous year based on what is shown on Box 1 of your W2 forms. You should also take note of any additional income you received in the “other income” box, which is line 21 of the 1040 form. Add up all of the income received in order to determine your total income for the previous year.
5. Determine Your Adjusted Gross Income
Your adjusted gross income is your total income for the previous year, minus any deductions you qualify for. Some deductions you may qualify for include moving expenses, IRA contributions, alimony paid, and student loan interest.
6.) File By April 15th
April 15th is the date that your individual tax returns are due from your previous year’s income. You may also file an extension for your taxes, on or before, April 15th in order to push the deadline back six months to October 15th. Additionally, April 15th is the last day you may contribute to your IRA fund from your previous year’s income unless you filed an extension.
7.) Get Free Assistance & Updates from the IRS
If your annual income is $58,000 or less, you can get free tax preparation assistance from the IRS. Visit an IRS Volunteer Income Tax Assistance (VITA) site to get help preparing a basic tax return and e-filing your return.The rules for tax credits and deductions are constantly changing. Check the IRS’s website for updates and news regarding certain programs.
Filing your taxes by yourself does not have to be an overwhelming process. Most people’s tax situations are pretty simple, so they do not need to hire a professional to prepare their tax returns. Now that you know how to do your taxes yourself, start gathering the necessary paperwork and begin working on your tax forms to ensure that you get your taxes done on time.