How to File Your Taxes
This guide walks through the individual income tax filing process in more detail, using plain English but with the structure and precision of a legal explanation.
⚠️ Note: This is a general educational overview. It is not legal or tax advice for your specific situation. Always consult current IRS guidance and a qualified professional where appropriate.
Confirm that a filing requirement exists
The first step is determining whether you are required to file a federal income tax return for the year. This generally depends on:
- •Your filing status (single, married filing jointly, etc.)
- •Your age (under or over the threshold for "65" in IRS rules)
- •Your gross income from all sources
- •Certain special circumstances (self-employment, special taxes, etc.)
The IRS publishes annual filing thresholds. If your income exceeds the threshold for your filing status and age, you are generally required to file. In addition, self-employed individuals with net earnings of $400 or more from self-employment typically must file regardless of other income.
📖 For a simpler overview, see: Do I Need to File Taxes This Year?
Assemble the factual record (documents)
Filing a return is essentially reporting a detailed record of your financial year. You begin by gathering documentation that supports each category of income, deduction, and credit.
Common items include:
- 📄W-2s from employers (wage income)
- 📄1099 forms (freelance, interest, dividends, etc.)
- 📄Records of self-employment income and expenses
- 📄Mortgage interest statements, property tax bills
- 📄Education forms (1098-T, student loan interest)
- 📄Childcare statements, charitable receipts, medical expense logs
Key principle: Accurate documentation is the foundation of an accurate return.
📖 For a detailed checklist, see: What Documents Do I Need to File My Taxes?
Choose your method of preparation and filing
Once you have your records, you must choose how you will prepare and submit the return:
💻 Tax Software / E-file
Answer guided questions; software generates Form 1040 and submits electronically.
👨💼 Tax Professional
Provide documents to a preparer (CPA, EA) who prepares and files for you.
📝 Paper Preparation
Complete Form 1040 by hand and mail to the IRS.
📖 For a comparison, see: Should I File Electronically or by Mail?
Determine your filing status and dependents
Your filing status (such as single, married filing jointly, head of household) affects your tax brackets, standard deduction, and eligibility for credits. It is determined based on your marital status and household circumstances on the last day of the tax year.
You must also determine who qualifies as a dependent (children or qualifying relatives). This affects exemptions and credits such as the Child Tax Credit and certain education and dependent care credits.
Calculate income and Adjusted Gross Income (AGI)
The core of the return is determining your total income and then your Adjusted Gross Income (AGI).
💵 Total Income
All taxable income from wages, interest, dividends, business income, capital gains, retirement distributions, and certain other sources.
🎯 AGI
Total income minus specific "above-the-line" adjustments, such as certain retirement contributions, HSA contributions, and education adjustments.
Important: AGI is a key number that many deductions and credits are based on.
Choose between the standard deduction and itemizing
After AGI is calculated, you reduce it further either by taking the standard deduction or by itemizing deductions if that produces a larger deduction.
📊 Standard Deduction
A fixed amount set by law for your filing status.
📋 Itemized Deductions
May include mortgage interest, state/local taxes (up to limits), charitable contributions, and certain medical expenses.
Goal: Use the method that yields the lower taxable income.
Apply tax rates, then credits
Once taxable income is determined, the IRS tax tables or brackets are applied to compute your preliminary tax. From there, you apply any nonrefundable and refundable tax credits for which you qualify (child tax credit, earned income credit, education credits, etc.).
💡 Why credits matter: Credits reduce tax dollar-for-dollar, rather than simply reducing taxable income.
Reconcile payments and determine refund or balance due
Finally, you reconcile your computed tax with amounts already paid during the year through:
- 💳Federal income tax withheld from paychecks (shown on W-2s)
- 💳Estimated tax payments you made directly to the IRS
- 💳Any refundable credits
If the total payments and refundable credits exceed your tax, you are entitled to a refund. If they are less, you have a balance due and may owe additional tax, penalties, or interest.
File the return and retain records
After you e-file or mail the return, retain copies of your filed forms and key documents for your records. These may be needed if you amend a return later or if the IRS requests additional information.
📖 For a simpler, step-by-step overview, see: How to File Your Taxes (Super Simple)
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