If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience.
It's tax season, and you're on the clock. You've got taxes to file and deadlines to hit. You've got forms upon forms, some of which you have on hand, others you're still waiting on. Where do you begin? How do you file? When is your paperwork even due?
No worries, we're here to help. We've put together a practical step-by-step guide to help you get started. By the end of this article, you'll be navigating your taxes like a pro.
The federal tax return deadline for 2024 is April 15. State tax return deadlines vary, so be sure to check these on your state government's website. Tax preparation websites like TurboTax often keep handy lists of up-to-date tax deadlines you can browse.
If filing taxes seems complicated, well, you're not alone. The more financial pools you enter, the more complicated your taxes become. Some people hire professionals to help them. Some use tax preparation software, and others do their taxes by hand.
Here's a quick guide you can follow along to guide your process, no matter how you file. Follow along to better file taxes during the 2024 tax season.
Tax season is the season of documents. Lots and lots of documents. You'll collect them at many points over the tax year. Employers send them. Banks and brokers send them. When you get documents, keep them somewhere safe. You'll want them on hand to file your taxes.
Employers and institutions send you tax forms throughout the year. Forms used to be sent via snail mail; today, they're also sent via email. Unsure where yours come from? Check both your mailbox and inbox for important tax forms.
Here are some of the most common tax forms:
Non-wage income is money you earn from alternatives to working part-time or full-time. Contract and freelance work qualifies as non-wage income. Money earned from savings account interest or dividend payments also qualifies as non-wage income.
There may be other forms sent to you by employers or companies you've done business with or made payments to. Keep this paperwork handy. You won't need to submit most of it to the IRS (Internal Revenue Service), but having it in one place will make completing your tax return much simpler.
You can file federal taxes directly through the IRS for free or pay for guidance. Many taxpayers opt to file with tax-filing software or with the aid of tax professionals. Some choose both.
There are pros and cons to each option.
You can file your federal taxes via the IRS website. Qualified taxpayers can file via a guided tax preparation software called IRS Free File. As of 2024, you must earn less than $73,000 in income to use IRS Free File.
If you don't qualify for IRS Free File, you can still file federal taxes for free. But you must do so with Free Fillable Forms, an online tax filing service that provides minimal guidance.
Filing through the IRS website is free of charge. Some states offer similar programs that make it easier to file state taxes. Check your state government's website for details.
You can file your federal and state taxes via tax preparation software. It's typically easier to file this way than by doing your taxes manually. Fields are auto-filled, math is calculated for you, and you're guided through each step of the process.
Most tax filing software costs money. You may pay up to hundreds of dollars to file your taxes this way. But you could save hours. The best tax software helps you pay less taxes and earn the highest possible refund -- and at an affordable sticker price.
Professional tax services range from straightforward filing to strategic long-term advice. Tax professionals can simplify filing by doing most of the work for you. Plus, they can help you shrink your tax bill, even when your documents get complicated.
Here are good reasons to consider hiring a tax professional:
Some filers opt for some combination of the above. Tax preparation software companies let you easily hire tax professionals to double-check your tax returns for errors.
Here comes the math: Determine your deductions and credits. Individuals and businesses can earn tax deductions and tax credits that reduce how much they owe the government.
There's a difference between deductions and credits. It boils down to timing: Subtract tax deductions from your income before calculating the taxes you owe. Subtract tax credits after calculating the taxes you owe.
Both are good for your wallet. When filing, you can opt for a standard deduction that reduces your taxable income by a flat amount. Or, you can itemize deductions manually. It's an important part of the filing process.
Once you've determined your deductions, you can begin to fill out your tax forms. The main form for individual taxpayers is the 1040. You may need other forms to report self-employment tax or itemized deductions. Business owners may need to submit other forms.
Double-check your forms. If you've just finished filling them out, consider setting them aside and returning to them the following day. That way, you can hunt for errors with fresh eyes.
Everything look clean? Congratulations! You're ready to submit your papers.
You can submit paperwork electronically or through the mail. If you've hired a tax professional, you may be able to have them submit your taxes for you. If you're using software, you can often submit directly through the website or app by clicking a button.
It's generally a good idea to keep tax records. If you are hit with an IRS audit (unlikely but possible), you may need these forms to make a case. Stick them in a folder, special inbox, or filing cabinet -- whatever you decide will keep it safe.
After you file your taxes successfully, one of two things happens:
The government charges you taxes if you owe them. But in some cases, the government does the math and realizes you're owed a refund. In that case, you could receive money back.
The IRS issues over 90% of refunds within 21 days of filing electronically. If you file by mail, it may take longer to receive your refund.
You can check your federal refund status on the IRS "Where's My Refund" website or the IRS2Go app. To check, you'll need the following:
Payments are staggered. If a family member gets their refund first, don't panic -- this is normal. If you think there's been a problem with your return, you can call the IRS.
It may take days, weeks, or months to receive your refund. It varies by state. You typically receive your state refund separate from your federal refund, assuming you're owed both.
Our Taxes Experts
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2024 The Ascent. All rights reserved.