Just the Facts: 5 Steps for Filing Your Own Federal Tax Return

5 Steps to filing your own federal tax return

Step 1: Gather Your Paperwork

If you are single and have just one job that withholds taxes from your paycheck, your taxes are relatively simple. It’s not until you have property, children, investments, and multiple income sources that tax filing gets hairy.

The first thing you need to do is gather up your documents:

  • A copy of last year’s tax return
  • W-2s and 1099s (and any other documents showing income)
  • Student loan interest statement
  • Mortgage interest statement (if you own a home)
  • Records of contributions made to health savings and retirement accounts
  • Any receipts or bank statements that you will use to support deductions

What if you didn’t receive a tax document that you need to file?

The Internal Revenue Service (IRS) offers tips on what to do if you do not receive your W-2 or other income documents by January 31.

If you need interest information from your bank or a lending institution such as a student loan provider, log in to the secure online site. Often financial institutions post PDF versions of tax documents for secure download.

The best rule of thumb is, if you haven’t received a tax document in the mail by January 31, contact the company or organization directly to check the status.

Step 2: Do Your Homework

The more you know, the more empowered you will be to tackle your taxes year after year and find ways to fatten your refund—or adjust your withholding to spread that money evenly throughout the year.

Start by studying tax credits and deductions, such as earned income tax credits, education credits, and charitable contribution deductions to see what you qualify for.

Then determine which federal tax forms you will need. Some of the most common forms include:

  • Form 1040 EZ—Use this form if you simply have a W-2 from your job(s) and you don’t plan to itemize deductions or file for tax credits (except the earned income credit).
  • Form 1040—Use this form if your taxes are slightly more complex. This is the form used by most U.S. citizens and residents.
  • Schedule A—Use this form to calculate itemized deductions.
  • Form 1040-ES—Use this form to calculate estimated tax on income that isn’t subject to withholding (such as self-employment pay from freelance work).

Step 3: Explore Tax-Filing Options

Once you gain some understanding of all that goes into filing your own taxes, take a deep breath and know that you are not alone. Tax help abounds, and often for free.

Free Tax Return Preparation
If you made less than $52,000 last year, you qualify to receive free tax help through the Volunteer Income Tax Assistance (VITA) Program, which sets up temporary locations in libraries, on university campuses, and in various other locations around the country from January to April each year. Visit the IRS free tax preparation help page to find a location near you.

Free File Software
Electronic tax-filing software can spare you some confusion and frustration. Plus, with the IRS Free File program, you save the expense of paying professionals who use similar software anyway. Check out the IRS Free File options as these vary depending on how much you made last year.

Paid Tax-Filing Software
Commercial tax software companies often offer live support, easy-to-follow questions, planning calculators, error checks, and more.

Depending on the complexity of your return, you’ll want to shop around for the software that best meets your needs. Start by checking out TaxACT, TurboTax, eSmart Tax, or other programs that offer a range of filing services.

Step 4: Reap the Rewards

Whether you owe the IRS or can look forward to a tax refund, know that filing on your own is a huge accomplishment, and it gets easier the more you do it. Just be sure if you owe, that you handle payments immediately, even if you can’t pay in full when you file.

Step 5: Prepare for Next Year

Take what you’ve learned this go ‘round, and start preparing for next year’s tax time:

While there is no grand celebration once you hit the “send” button on your e-filed return, preparing your own taxes does build confidence and knowledge that can open the door to better financial decision making throughout the year. So, go ahead. Throw yourself a tax-time party once your return is filed. You’ve earned it.

[Any reference to a specific company, commercial product, process, or service does not constitute or imply an endorsement or recommendation by National Endowment for Financial Education.]