10 Things to Know About U.S. Tax Filing
Essential Tips for Every Taxpayer
U.S. tax filing can be complex, with important deadlines, paperwork, and rules to keep track of each year. Taxpayers must stay informed to avoid common errors and take advantage of potential benefits.
Understanding the key aspects of filing ensures individuals accurately fulfill their obligations and make the most of available tax credits and deductions. This overview highlights what every filer should keep in mind before starting the process.
1) Federal tax returns are generally due on April 15 each year.
Every year, the Internal Revenue Service (IRS) sets April 15 as the main deadline for individual federal income tax returns. This is when most taxpayers are expected to file their tax forms and pay any taxes owed.
If April 15 falls on a weekend or a federal holiday, the deadline is pushed to the next business day. This adjustment ensures that taxpayers always have a regular workday to complete their filing.
Missing the April 15 deadline can lead to penalties and interest on unpaid taxes. It’s important for individuals to plan ahead and gather all necessary documents well before the due date.
For those who cannot file by April 15, an extension is available by submitting the appropriate IRS form. However, an extension to file does not extend the time to pay any taxes owed.
Staying aware of the annual deadline helps individuals avoid last-minute issues. It also supports a smoother tax filing process.
2) You must file a tax return if your income exceeds the standard deduction ($13,850 for 2023).
For the 2023 tax year, the standard deduction for single filers is $13,850. This is the minimum threshold that determines if a single taxpayer is required to file a federal income tax return.
If a person’s gross income is greater than $13,850 for the year and they are single, they must file a tax return. The IRS uses this rule to identify who is legally required to submit tax documents.
Married individuals filing separately also follow this $13,850 standard deduction amount. Those who earn less may not need to file, but other factors such as self-employment income or being claimed as a dependent can change that.
Heads of household, married couples filing jointly, and qualifying widows or widowers have different, usually higher, standard deduction amounts.
Income that counts toward this threshold includes wages, salaries, tips, and taxable investment earnings. It is important to add up all sources of income to determine if the filing requirement applies.
3) Use IRS Free File if your income is $84,000 or less for free tax preparation.
IRS Free File is an online service that provides free federal tax preparation and filing for individuals with an adjusted gross income (AGI) of $84,000 or less. This program partners with trusted tax software providers to help users prepare and file their taxes at no cost.
Filers can access guided tax preparation through the IRS Free File program. The software helps walk users through each step, ensuring all necessary information is included. This option is available to most workers, students, and retirees who meet the income requirement.
Those with incomes above $84,000 cannot use the guided tax preparation software but may use Free File Fillable Forms. These forms are available online and allow users to file federal taxes on their own, but without step-by-step guidance.
IRS Free File is secure and available through the IRS website each tax season. Taxpayers should always start at IRS.gov to avoid third-party fees and make sure they are using the official service. The service opens each year in January and runs through the tax deadline.
4) Keep all income documents like W-2s and 1099s to accurately report earnings.
Taxpayers should collect every income document they receive. W-2s are for employees and show wages, taxes withheld, and other important details from their employer. Anyone doing freelance, contract, or self-employment work should also expect Form 1099.
It is essential to keep every W-2 and 1099 received for the year. Missing these forms can lead to incomplete reporting and possible errors on a tax return.
Forms like 1099-NEC, 1099-MISC, and 1099-INT report different types of income beyond regular wages, such as contract work or interest income. Taxpayers must report all types of income listed on these documents.
All income sources are important, and the IRS receives copies of these documents too. Keeping them organized helps avoid omissions or mistakes, reducing the risk of audits or follow-up notices.
Gathering every required income statement before filing promotes accuracy and ensures compliance with IRS requirements. If a form is missing, taxpayers should contact the issuer as soon as possible.
5) Older taxpayers (65+) get a higher standard deduction.
Taxpayers who are age 65 or older benefit from an increased standard deduction on their federal tax return. This additional amount helps lower taxable income and may reduce the overall tax bill.
For the 2024 tax year, an individual age 65 or older can add $1,550 to their standard deduction. If both spouses are 65 or older and filing jointly, each receives this extra amount, totaling $3,100 in addition to the standard deduction for married couples.
This higher deduction is automatic, so qualifying taxpayers don’t need to take extra steps beyond indicating their age on the tax form. The increased deduction applies whether or not other deductions are claimed and does not require itemizing.
Taxpayers turning 65 during the tax year are eligible, as the IRS considers someone 65 on the day before their 65th birthday. This rule ensures that more seniors can take advantage of the higher deduction even if their birthday falls late in the year.
This provision makes tax filing simpler for older adults, as it can be claimed without additional paperwork or documentation. The higher deduction allows qualifying seniors to keep more of their income.
6) Filing electronically can speed up your refund compared to paper filing.
Filing taxes electronically is typically faster than submitting a paper return. When individuals e-file and request direct deposit, refunds are usually processed in less than three weeks.
The IRS generally processes electronic returns in about two to three weeks, while paper returns can take four to six weeks or longer. This difference is due to manual handling and mailing times required for paper forms.
Electronic filing also reduces the risk of errors that could delay processing. Tax software often checks for common mistakes before submission, helping to ensure accuracy.
Choosing direct deposit for refunds, combined with e-filing, can further cut down wait times. Refunds sent by paper check may take additional days to arrive by mail.
People who file on paper might experience longer processing times during busy tax periods. Electronic filing remains the recommended method for those who want their refunds quickly.
7) Tax credits and deductions reduce your taxable income and can increase refunds.
Tax credits and deductions are important tools to help lower a person’s overall tax bill. Credits and deductions work differently but can both reduce how much someone owes at tax time.
A tax deduction lowers taxable income. This means less income is subject to tax, which can cut the final tax bill. Common deductions include mortgage interest, student loan interest, and contributions to retirement accounts.
Tax credits directly reduce the amount of tax owed, dollar-for-dollar. Some credits are refundable, which means a person may receive a refund if the credit is larger than the tax owed. Examples include the Child Tax Credit and the Earned Income Tax Credit.
Taking advantage of credits and deductions can help maximize a tax refund or decrease payment. It’s important to review all possible options and keep receipts and documentation for any claims.
8) You must report all sources of income including freelancing and investments.
The IRS requires taxpayers to report income from all sources, not just wages from a traditional employer. This includes any earnings from freelance work, side gigs, or contract jobs. Even if the income is not reported on a tax form like a 1099, it still needs to be included in the tax return.
Investments such as stocks, bonds, dividends, and interest payments are also considered taxable income. These should be reported regardless of the amount or whether a tax form was issued for them. Not reporting these sources can lead to issues with the IRS in the future.
Both freelancers and those with investment income are viewed as self-employed or as having additional income streams. Accurate record-keeping throughout the year helps ensure all income is correctly reported. This helps avoid penalties and ensures compliance with IRS rules.
9) Use IRS online tools to check if you need to file based on your income and status
The IRS offers online tools that help individuals determine if they need to file a federal tax return. These tools take into account a person’s income, filing status, and other factors.
By answering a series of simple questions online, taxpayers can quickly find out if filing is required for their specific situation. This reduces guesswork and saves time when preparing for tax season.
The process does not require creating an account or submitting personal documents. Users simply provide information such as their age, filing status, and income amounts. The tool then delivers clear guidance based on current IRS rules.
These online resources are updated regularly to reflect any changes in tax laws. They can be especially useful for people whose income or filing situations change from year to year.
Anyone unsure about their requirements can use these tools without charge. This makes it accessible and practical for most tax filers in the United States.
10) Planning ahead with receipts and forms helps avoid errors and delays.
Keeping tax documents and receipts in one organized place makes it easier to file an accurate return each year. When individuals have quick access to W-2s, 1099s, and receipts for deductions or credits, they can enter information correctly and avoid missing items.
Entering incorrect information, such as a wrong Social Security number or missing income, can cause delays and may even lead to IRS notices. Accurately reporting every required detail helps the IRS process returns faster and issue refunds without complications.
Ensuring all tax forms and supporting documents are available before starting the filing process also saves time. Tax professionals recommend maintaining records for at least three years in case the IRS requests verification or an audit arises.
Planning ahead by gathering needed paperwork lets filers focus on accuracy rather than scrambling for documents at the last minute. This approach reduces stress and lowers the risk of making common mistakes that could slow down processing.
Understanding U.S. Tax Forms
U.S. tax filing relies on specific forms to report income, claim credits, and calculate what is owed or refunded. Each taxpayer might encounter different documents depending on their income sources and filing situations.
Key Tax Documents You May Receive
Taxpayers often receive official forms from employers, banks, and other institutions by late January or early February. The most common is the W-2, which reports wages and withheld taxes for employees. Independent contractors typically get Form 1099-NEC for non-employee compensation. Financial institutions issue 1099-INT, 1099-DIV, and 1099-B to report interest, dividends, and investment sales, respectively.
Social Security benefits are reported on SSA-1099. Mortgage interest, student loan interest, and tuition payments appear on forms like 1098 and 1098-T. Keeping these documents organized is crucial for accurately reporting income and claiming available deductions or credits. Mistakes or missing forms can delay filing and cause IRS notices.
Differences Between Form 1040 Variants
Form 1040 is the standard federal income tax return for most individuals. However, there are simplified variants. Form 1040-SR is designed for seniors, with larger print and a straightforward layout, but covers the same topics as the regular 1040. While the 1040-EZ and 1040A once offered basic filing for simple tax situations, they were discontinued after tax year 2017.
All current filers use Form 1040 or 1040-SR, attaching schedules as needed to report additional types of income, credits, or deductions. The IRS offers instructions for each form to help taxpayers select the correct one for their needs. Using the correct form ensures proper processing and helps prevent errors.
Common Tax Filing Challenges
Taxpayers often run into problems when filing because of missing documents or mistakes in their calculations. These issues can slow down refunds, trigger IRS notices, or lead to paying more than necessary.
Dealing with Missing Information
One of the most frequent obstacles is the lack of required tax documents. Missing W-2s, 1099s, or records for deductions can cause delays or even force taxpayers to file amended returns later.
Individuals should create a checklist of needed forms before starting. This includes income statements, receipts for deductible expenses, and relevant identification numbers. Early organization helps reduce the risk of overlooked information.
It is important to watch for all documents in the mail or electronically from employers, banks, and other financial institutions. Using a folder or digital storage system for these records makes retrieval easier and filing on time more likely.
Failure to include all information may result in the IRS flagging a return for review, which can hold up any expected refund. Staying organized and double-checking form completion helps prevent unnecessary IRS correspondence or penalties.
Avoiding Calculation Errors
Errors in math remain a common cause of processing delays and incorrect tax bills. Simple addition or subtraction mistakes, transposed numbers, or wrong totals for credits and deductions are frequent.
Filing electronically with tax software helps minimize these errors, as it performs most calculations automatically. Taxpayers should still review input for accuracy before submitting. For those filing on paper, using a calculator and carefully checking each entry can prevent common mistakes.
Incorrect figures may change a refund amount or create a payment due where none is owed. In some cases, math errors increase the risk of an IRS letter or even an audit. Accuracy in calculations, especially with deductions and credits, is essential to ensure a smooth filing experience.
