Filing your taxes can seem like a daunting process, but with a little organization and preparation, you can ensure you'll file on time and with accuracy from the comfort of your own home. Here's what you should do to be ready for the tax filing deadline.
The federal tax filing deadline for individuals has been extended to May 17, 2021. Quarterly estimated tax payments are still due on April 15, 2021. For additional questions and the latest information on the tax deadline change, visit our “IRS Announced Federal Tax Filing and Payment Deadline Extension” blog post.
For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.
Whether you're filing your taxes for the first or the fiftieth time, it's always a good idea to take a minute to gather your tax information ahead of time so you can file faster.
Starting with a firm grasp of what goes into filing, the documents you'll need and the terms that are helpful to know, you'll know how to file taxes online and be done in no time. Tax software like TurboTax can simplify everything and guide you through the process all the way from start to finish.
Common forms to gather
One of the first things to do is gather all of the forms you'll need to file your tax return. Consider starting a folder for your tax return at the beginning of a tax year. Then, put any important tax information you receive in that folder until you're ready to file your tax returns.
Most of these forms will show up after the end of a tax year in January or early February. However, some forms may show up even later. It's important to wait until you receive all of the forms you're expecting before you file your tax return or you may leave out an important item.
Common forms to look out for include:
- Form W-2, Wage and Tax Statement
- Form W-2G, Certain Gambling Winnings
- Form 1099-DIV, Dividends and Distributions
- Form 1099-INT, Interest Income
- Form 1099-MISC, Miscellaneous Income
- Form 1099-NEC, Nonemployee Compensation
- SSA-1099, Social Security Benefit Statement
- Form 1099-G, Certain Government Payments
- Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
- Schedule K-1, Partner's or Shareholder's Share of Income, Deductions, Credits, etc.
- Form 1098, Mortgage Interest Statement
- Form 1098-T, Tuition Statement
- Form 1098-E, Student Loan Interest Statement
Forms may be mailed to you or you may be able to access them online. If you haven't received your W-2, check with your employer, online, or even with the IRS. TurboTax tax software can import your W-2 electronically and even notify you when your W-2 is available to begin your tax return.
Check your tax information from last year to see if you received the same forms this year. If you're missing something, check to see if you no longer need that information. For instance, you may no longer receive a Form 1099-INT if you closed your bank account that issued it last year.
Additionally, you may experience new situations in a tax year that you haven't experienced before. You'll have to make sure you think through the year to determine if there are any new forms you may receive so you can keep an eye out for them.
TurboTax can help give you peace of mind by asking questions to help ensure you've included everything in your tax return.
Common deductions to consider
Tax deductions can reduce your taxable income and therefore the taxes you owe. While there are quite a few tax deductions, here are some of the most common ones you may want to consider taking advantage of.
First, you can usually either take the standard deduction or itemized deductions. The standard deduction is a set amount based on your age, filing status, and whether or not someone else claims you as a dependent.
Itemized deductions are composed of several items based on your actual expenditures and include the following:
- Mortgage interest
- State and local income or sales taxes
- State and local property taxes
- State and local real estate taxes
- Medical and dental expenses in excess of 10% of your adjusted gross income
- Charitable donations
- Casualty and theft losses from a federally declared disaster
- Other itemized deductions such as gambling losses and more
If you don't know which is the better option for you, don't worry. TurboTax will search over 350 tax deductions you qualify for to get you the biggest tax refund.
Other common deductions can be found on Schedule 1, such as:
- Educator expenses.
- Health savings account deduction.
- Moving expenses for members of the Armed Forces.
- The deductible portion of self-employment tax.
- Self-employed SEP, SIMPLE and qualified plans.
- Self-employed health insurance deduction.
- IRA deduction.
- Student loan interest deduction.
- Tuition and fees.
Understanding your tax bracket
Understanding your tax bracket is pretty straightforward. The federal income tax system is based on a marginal tax rate system. This means your effective tax rate is determined by taxing your income in each tax bracket that applies to you rather than taxing all of your income at the top tax bracket you fall into.
- Currently, your first taxable ordinary income dollars will usually be taxed at 10%.
- Once your income exceeds the 10% bracket, additional income will be taxed at 12% until you exceed that bracket and so on.
You can use our tax bracket calculator and the tax rate schedule to help you figure out how your income is taxed as well as the top tax bracket you fall in. Only the additional income that falls into your top tax bracket will be taxed at that top rate.
The benefits of filing your taxes online
After you understand what forms you need, common deductions to consider and your tax bracket, it's time to start the process of filing your taxes. You should strongly consider filing your taxes online thanks to the power of e-filing.
- E-filing allows you to electronically submit your tax return to the IRS.
- The IRS processes e-filed tax returns much faster than mailed tax returns.
- If you're expecting a refund, the IRS normally processes refunds faster for e-filed returns as well.
Figuring out how to file taxes online isn't difficult. TurboTax makes it easier than ever with its tax preparation software. Simply grab the tax information you gathered earlier and answer simple questions. TurboTax then takes that information and uses it to complete your tax return for you. Once all of the information is input, you can e-file your taxes online and from home.
Looking for expert tax help? TurboTax Live offers real tax experts and CPAs to help with your taxes—or even do them for you. You can get a final review of your tax return before you file to ensure your taxes are done right, or you can even have a dedicated tax expert do your taxes for you, from start to finish, with TurboTax Live Full Service. You get unlimited tax advice year round year, so you can be 100% confident your return is done right, guaranteed. TurboTax Live experts are highly knowledgeable, with an average 12 years experience in professional tax preparation. Their tax advice, final reviews, and filed returns are guaranteed 100% accurate. Learn more about How TurboTax Live Works.