Adulting 106
Filing Taxes:
• Gather your personal info and tax forms: Collect your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), along with those of any dependents (like children).
• Gather all forms showing your income from the past year. Employers and financial institutions typically send these out by late January:
◦ W-2: If you are a standard salaried or hourly employee.
◦ 1099-NEC / 1099-MISC: If you did freelance, contract, or side-gig work.
◦ 1099-INT / 1099-DIV: From your bank or brokerage for interest and dividends earned.
◦ 1098-E or 1098-T: For student loan interest or college tuition payments.
• Choose your filing method: Decide how you want to file. Most people use online tax software because it walks you through a simple question-and-answer format:
◦ IRS Free File: If your adjusted gross income is $89,000 or less, you can use for free through the official IRS portal.
◦ Direct File/FreeTaxUSA/TurboTax: Trusted online platforms that guide you step-by-step.
◦ Hire a professional (CPA): Consider this if you own a complex business, have rental properties, or had massive life changes.
• Determine your filing status: Your software will ask you to pick a status. This determines your tax brackets and your standard deduction amount. Choose the option that fits your life situation on December 31st of the tax year:
◦ Single: Unmarried.
◦ Married Filing Jointly: Married and filing a single return together.
◦ Married Filing Separately: Married but filing independent returns.
◦ Head of Household: Unmarried, but you pay more than half the cost of keeping up a home for a qualifying dependent.
• Input your income: The software will prompt you section-by-section. Copy the numbers exactly as they appear from your W-2 or 1099 forms into the matching digital boxes. The software uses these numbers to calculate your Adjusted Gross Income (AGI).
• Claim deductions and credits: Ductions lower your taxable income. You have two choices:
◦ Standard Deduction: A fixed dollar amount given automatically based on your filing status. Roughly 90% of taxpayers take this because it's higher than tracking individual expenses.
◦ Itemized Deductions: Listing out individual deductible expenses (mortgage interest, large charitable donations, medical expenses). Only do this if the total is greater than your standard deduction.
• The software will also check if you qualify for tax credits (like the Child Tax Credit or Earned Income Tax Credit), which directly reduce the amount of tax you owe dollar-for-dollar.
• Review and hit submit: The software will double-check your return for math errors or missing information. Once cleared, it will show your final tally: you will either receive a refund (the government owes you money because you overpaid throughout the year) or you will owe a balance.
• Provide your routing and account numbers for direct deposit (the fastest way to get a refund) or to schedule a payment, then digitally sign and e-file your federal and state returns.
• Important Reminder: The traditional deadline to file your federal income tax return and pay any tax owed is April 15th of each year. If you need more time, you can file for an automatic 6-month extension (giving you until October 15th) using Form 4868, but note that this extends your time to file, not your time to pay any taxes you owe.
