Introduction
Though, filing taxes doesn’t have to be dreadful if it is all new for you or you are doing it yourself for the first time and without the help of an accountant/tax preparation software. However, to do your taxes on your own, with some basic information for the overall process and the forms you need to fill, will not be challenging at all. In this article, the reader will be informed about the steps and procedure of filing the federal and state income tax on their own and some useful tips and will try to solve this question; is it hard to file your own taxes?
What Kind of Documentations Will I Be Filing?
The general federal tax return form that you will need to complete filing include the 1040 form. This is where you’ll determine your federal taxable income, federal tax liability or amount of taxes owed or received. The particular version of the 1040 form that you will need to fill depends on your individual circumstances. For instance, we have the 1040-EZ for easy preparation designed for those who have simple tax returns, while 1040-A is slightly complicated. Make sure you are using the right variant of 1040 prior to engaging in any further steps.
Depending on your situation and for the state where you live in, you may be required to file state tax returns besides your federal 1040. All the states usually have some form where the state tax liability is computed. You can look for the forms on your state’s department of revenue website to find the right forms.
Last but not least, if you receive investment income, own a business, have rental income, or freelance as a contractor, you may find you need to complete extra schedules and forms to do with such income.
What Preparation Should I Have Done for My Taxes?
Tax filing entails compilation of necessary documents before filing of the taxes. This should include, for instance, wage and tax statements from employers, forms 1099 showing income from investments or from contract work, statements of mortgage interest and receipts/summaries of large donations you gave throughout the year.
You’ll also need to have some basic information at your fingertips such as your social security numbers as well as that of your spouse and any dependents you may have. Another idea is to put together a folder or a binder where all the physical and electronic copies of the documentation regarding tax issues can be placed and divided systematically.
Before getting down to complete the returns, compile all your forms, and make sure all receipts, income totals, deductions, and all other relevant information is there and well organized. This way the work that is to be done in preparing your tax returns is not stressful when you found the information you need.
What Should be Done Firstly?
Once you’ve gathered all the needed paperwork, follow these key steps to complete your tax return forms:Once you’ve gathered all the needed paperwork, follow these key steps to complete your tax return forms:
1. Determine your gross income for the year by including salaries and wages, investment, freelance income, and any other taxable income amount. Carry these totals to your Form 1040 or the state equivalent of the form.
2. The next step is to consider which deductions and credits could potentially be applicable in the case of the taxpayer. Other examples of the same are; Home or Mortgage interest, charitable donation, capital losses among others Tax credits also help in reducing tax liability, for instance Child Tax Credit.
3. Gross income is then minimized by using deductions and credits to arrive at your taxable income and eventually the tax for the year or the refund you are entitled to. You can find the process in the form 1040 and the form 1040 instructions for completing the mathematical computations.
4. Check your math at least twice or thrice during your calculation if you are performing manually and if you are using the online tools or tax software for the same then also check your calculations twice or thrice. It is with small calculation errors that they end up developing bigger problems and causing time wastage.
5. Fill out all other tax forms and schedules necessary due to some factor or other relevant to your tax situation for the year. For instance Schedule C for business income, Capital Gains\Loss Schedule D and all that.
6. Sign and date your 1040 tax form(s) if you have completed your tax form through the 1040. It is also useful to sign/date any related schedules necessary as well.
What Recommendations Would Help in Filling the Papers?
Follow these tips and tricks throughout the filing process to ease confusion and anxiety around doing your own taxes:Follow these tips and tricks throughout the filing process to ease confusion and anxiety around doing your own taxes:
• Go to consult free help with the answer of your tax questions. If there is misunderstanding or confusion as regards the instructions that accompanies the form, local assistance centers of the IRS can be of help.
• As for math/forms, use online calculators and tools to have less difficulty. Some of them are free to download on the IRS website as they come in various forms such as online applications, pdfs, or fillable forms.
• Start organizing documents for the following year as this will help in preparation. Others include collecting files such as W-2s and 1099s immediately to prepare for taxes for the year 2023.
• If you get stumped, get low-cost tax software and do it yourself. Here, for $20-$50, specialized software, such as TaxAct or TaxSlayer, can help DIY filers.
The Bottom Line
But as this article will show, filing the personal income taxes is completely doable without the need for a tax professional if one has the right preparation and information is it hard to file your own taxes. It is advisable to be organized from the initial states of your task, leverage on any helper tools available and do not hesitate to ask for questions from any good source. Proceed with the outlined procedures to ensure you get the best of deductions and credits when filing the returns and be confident with the final completion.
