How to File Your Own Taxes: A Step-By-Step Guide
Taxes are never an exciting time. A lot of the annoyance and uncertainty comes from not understanding the system in the first place. The good news is that it doesn’t have to be hard!
Understanding how to file your own taxes comes down to collecting information and filling out the right forms. The complex part comes from knowing what information and what forms you need.
We’ll clear the air and get the basics down so you can be filing your taxes with ease in no time. Let’s get started.
The Ultimate Guide on How to File Your Own Taxes
Paying for a professional to handle your taxes can be nice, but it is also expensive. If you want to enjoy your refund, you will need to dive into the world of taxes on your own.
You have two major options when you go to file your taxes on your own. You can file them using a tax service with free guidance or you can go the manual way.
Each has their positives and negatives, so neither is the right way.
1. Using a Tax Service
A tax service will often have helpful guides and easy to fill forms for you to follow. They have simplistic and often free options to bring you through each step.
This is a middle ground between a professional accountant and manual filing. You will still need to prepare all your forms and information and will pay for anything beyond basic W-2 filing.
2. The Manual Approach
The manual approach is all on you. You will need to find the forms you need, fill in the information in the right areas, and submit them on time to the IRS.
The positives of this comes in the form of absolute control and no expenses. All the forms are free and there are many online guides to help hammer out specific form details.
The Forms You Need
No matter which method you choose, you need to understand what forms you need to get. There are dozens of forms for every detail, but for more Americans, there are a small handful that matter.
The major one is the W-2. Your employer will hand you your W-2 form. If you have no proper employer or a unique problem blocks your W-2, you can find an online W2 generator.
Freelancers will need a 1099 form. This is the other major form and is for those dealing with contract work and multiple sources of freelance employment.
Tax Brackets and Determination
Tax brackets sound complicated but are rather simple. The idea is to take your annual income and see where it lands on the bracket structure. Your bracket will determine the number of taxes and the potential refunds.
The average American will not be a high enough tax bracket for any major alterations. As such, most of it will be a simple straight number crunch.
Understanding Deductions
The final note is deductions. You can take the simple tax bracket percentage, remove it from your income, and get your taxed money.
What you miss then are the extra benefits of tax deductions. Deductions are rewards for doing certain items or having certain details. These allow for reductions on your needed payments and thus often increase your refund.
There are a massive number of potential deductions, so do your research.
Getting That Refund for Something Fun
Now that you have a bit better grasp on how to file your own taxes, this next tax season won’t be so daunting! All it takes is a bit of a guide and some breakdown of knowledge and you are good to go.
Once you got that wonderful refund in hand, there is so much you can do with it! Fun new gadgets and delightful vacations are all open. Check out our other articles to see what entertainment might spark your interest.