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5 Simple Steps To File An Income Tax Return

    5 Simple Steps To File An Income Tax Return

    From figuring and calculating your tax due to claiming reimbursements for overpayment, filing a tax return can be complex. Considering how vital it is that you do it correctly, this may be a difficult and overwhelming task.

    Keeping this in mind, this article provides a few tips for submitting an income tax return.

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    1) Prepare All Necessary Documents

    When submitting an income tax return, a substantial amount of documentation is required. Here is a checklist of the most common paperwork, records, and information you’ll need to prepare in advance and bring with you:

    Social Security Number

    The IRS utilizes your SSN as a reference to verify the income you reported on your tax return. And generally, all you need is the number, so you can still file your taxes if you lose your social security card. However, the Social Security Administration (SSA) suggests asking for a replacement card if yours has been lost or stolen.

    Income Or Earning Statements

    You must submit a W-2 form to your employer with your tax return. If you were a freelancer or independent contractor, you must submit IRS Form 1099.

    These income statements are crucial because they contain information that can be used to compute your taxes, including your income and prospective deductions. Your company may also provide you with additional paperwork for health insurance or retirement payments.

    All the information required for your tax return will come directly from your business records (or receipts) if you are self-employed. For example, consumer or vendor sales receipts.

    In addition to income statements, you can create Form 1098 if you paid any mortgage interest. Alternatively, complete Form W-2G for gaming gains.

    While this may not be a legal requirement, it is highly suggested that you preserve a copy of your past income tax returns in order to better prepare for future filings. This is especially true because you can use your prior tax returns as a reference or a reminder.

    2) Check If You Need To File A State Tax Return

    If you are a resident of the state in which you work, you are required to file a state income tax return. However, if you reside in one state and work in another, your home state may also compel you to file a tax return.

    Non-residents may be forced to pay taxes on their earnings from wherever they earn them if they live in one location and work in another.

    3) Choose A Filing Status

    Choosing your filing status is crucial, as it can affect a variety of aspects of your tax return. It will also influence your filing requirements, standard deductions, tax rates, and eligibility for tax credits and deductions, among other things.

    5 Simple Steps To File An Income Tax Return

    United States federal income tax return form IRS 1040 with a blue pen
    There are various filing statuses to choose from:

    Choose this option if you are unmarried and do not have qualified dependents.
    Head Of Household: This option is available to unmarried individuals who provide a home for at least one qualified dependant.
    This is the most advantageous filing status for married couples in terms of greater standard deductions and other advantages.
    Married Filing Separately: This is the ideal option if you and your spouse have significantly different tax liabilities and high incomes. Filing separately can protect one partner from the tax burdens of the other.
    Qualifying Widower: This benefit can be collected after two years if you have a qualifying dependant and your spouse passed away.

    4) Collect Your Receipts For Deductions And Credits

    Your tax return will certainly benefit from a few deductions and credits, but you must provide supporting evidence. You can preserve receipts from charitable gifts, medical costs, and other business-related expenses.

    Consequently, ensure that your receipts are in order. Sort them into categories such as “house improvements” or “business expenses” if feasible, so that they are easier to discover when filing your tax return, and so that they are not lost or discarded.

    A further piece of advice is to retain duplicates of everything. You never know when an old receipt may come in handy in the future; having numerous copies might make amending returns from prior years easier.

    5) Determine Your Filing Method

    You have essentially three alternatives for filing your income tax return. It can be completed online, via mail, or by engaging a tax expert. Depending on your preferences and requirements, you may pick one of these two filing methods.

    There are no charges connected with filing your taxes electronically. If you prefer to submit your taxes by mail, there are no fees involved, but it will take the IRS longer to process your return and release your refund or any tax due.

    Lastly, if you want to hire a professional, which might be advantageous if this is your first year reporting income or assets, their cost structure will include the service fee.

    What If You Need To Amend Your Tax Return? 

    Suppose you made a mistake on your tax return and didn’t notice it until after filing. In such a circumstance, there is no need to panic, as it might happen to everyone.

    5 Simple Steps To File An Income Tax Return

    Miscalculations, incorrect or forgotten deductions, and reporting only a portion of one’s income are examples of common errors.

    Consider taking the following measures to correct these mistakes on your tax return:

    Check to see if you really did make a mistake on your tax return by looking it over carefully.
    Determine if the IRS has already identified this issue. It is possible that the IRS has already remedied your mistake based on the information they possess (considering they keep track of 1099-C and W-2 data, and may occasionally use it to correct your data).
    Form 1040-X, the amendment tax return form, must be filed if these conditions are met and you are certain you need to make changes. This form can be used to edit or add information to your tax return documents.
    If you find out that you overstated your income, for example, and have to pay more taxes because of the change, you should do so as soon as possible to avoid paying interest.

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