How to Prepare Income Taxes

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Prepare Income Taxes
Prepare Income Taxes

How to Prepare Income Taxes. To prepare your income taxes, you must have all of your financial information from the last year, as well as your financial and employment data from the current year. If your financial situation is unusually complex, you may need to consult a professional tax preparer.

Choose whether you plan to prepare your taxes online or via printed forms. Consider the costs and time required for each option.

Obtain your income tax forms if you decide to fill out printed forms. You can get them online, at a library or from a post office. If you are filing as an individual or with your spouse, you probably will need Form 1040 and its instructions. Consult the instructions for Form 1040 to decide whether you need other forms.

Complete the worksheets included with the instructions for Form 1040 before filling out your income tax return. Complete your federal-tax form, and mail it to the IRS office, according to the listing on the back page of the instruction booklet.

Go online to access a list of tax preparers. Visit the IRS website for a list (see Resources below).

Follow the directions to complete your tax preparation on the company's website.

Consult your state-tax agency's website to determine which forms you need to file for state income tax. The forms vary by state, and not all online preparers offer services for filing income tax forms for all states.

Tips & Warnings

  • The IRS offers two options for preparing your taxes online. If your income is under $52,000, you can use the Free File program to prepare your taxes at no cost. If you don't qualify, the IRS maintains a list of online preparers that have passed the requirements to become e-file partners.
  • The IRS recommends using tax-preparation software because it greatly reduces the chance of miscalculations.
  • When preparing your income tax, make sure you file both your federal and state tax returns.
  • If you are married, you have the option of filing a joint return with your spouse. However, if you are both employed full-time and have no dependents, you will usually owe less if you file separately.

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