How to File Your Own Taxes

Filing taxes is easier than you think. The process starts when you receive your W-2, 1099, interest- and dividends earned-statements, and tax booklet. You can download the needed forms from the IRS website (see Resources). Practice doing your taxes on a sheet of paper before completing the tax form. This article concerns Form 1040-A, but the concepts are applicable to other income-tax forms.

Difficulty: Moderate

Instructions

Things You'll Need:

• Calculator

1. Place your address label over the "Label Here" box on the tax form; this label comes with the tax booklet the IRS sends you. If you didn't receive one, print your name, your spouse's name (if you're married) and your address in the label box. Put your Social Security number, and your spouse's, in the "Social Security" boxes. Check the box under the Social Security box if you want money allocated to the Presidential Election Campaign (see Tips).

2. Place a check in one of the five boxes representing "Filing Status"; only check one box (see Tips). Complete the "Exemptions" section, check the box for "yourself," and for "spouse" if you're filing joint, then write your children's names in the Exemptions' "Dependents" section. Provide their full names, their Social Security numbers and their relationship to you. Check "Qualifying child for tax credit" if they meet the instruction booklet's criteria. Complete the "Boxes checked" section, which tallies and sums the exemptions you claimed in the "Exemptions" section.

3. Look at the figure in the "Wages, Salaries, Tips, etc." section of your W-2, then place that number in the "Wages, Salaries, Tips, etc." section of your tax form. Total all of the interest you've earned and enter the value on the next line down; repeat the process for dividends. Fill in the Capital Gains, IRA, Pensions, Unemployment Compensation and Social Security Benefits (see Tips). Add these numbers for a new total. Complete the "Adjusted Gross Income" if applicable to you; then subtract the amounts you recorded there from the "New Total" to get your "Adjusted Gross Income."

4. Write your adjusted gross income on the last line of the front page, and on the first line of the second page. Complete the "Tax Credits and Payments" section, then proceed to the "Standard Deduction" section. Select the standard deduction applicable to you from the box on the left and write that number in the "Standard Deduction" line. Subtract this number from your adjusted gross income; this is your "Subtotal." Place a 0 in this "Subtract" line if your standard deduction is higher than your adjusted gross income, you wont owe taxes.

5. If your standard deduction was less than your adjusted gross income, enter the difference in the "Subtract" line. Go to the next line and multiply your total exemptions from Step 3 by the number indicated. Write this number on the "Multiply by" line. Subtract this number from your "Subtotal" to get your "Final Total." Place a 0 in this line if the number from the "Exemptions" line is higher than the "Subtotal" from Step 4. Know that this 0, as well as the 0 in Step 4, means that you didn't have tax liability for the previous year; all of your taxes will be refunded. Also know that, if the number from the "Exemptions" section is less than your subtotal, the difference is the amount for which you're liable for taxes (see Tips).

Tips & Warnings

• Checking the "Presidential Election Campaign" box won't increase your tax bill or reduce your refund check. It merely means that you, as a taxpayer, are authorizing the government to allocate money to the election process as part of public funding. Your state income tax gives you the option to allocate the state equivalent of this fund by political party; it still won't increase the taxes you owe or decrease the refund you'll get. If you've gone from high school to college, your parents could still claim you as a dependent. They'll include you in their tax forms; provide them with your W-2s, 1099s and Interest/Dividend earning statements. Each tax form comes with an easy-to-follow instruction booklet. It takes you every step of the way, line item for line item, as you complete the tax form. If you're not sure what to place in a line, refer to the instruction booklet for specifics. Some of the lines on the tax forms tell you what page to consult. For example, the "Exemptions" section will tell you what page to look at to determine if your children qualify for child tax credits. You'll find that most the sections of the tax forms don't always apply to you. For example, if you're not receiving retirement payments, you'd leave the "Pensions and annuities" blank. If you're not receiving Social Security, you'll leave the Social Security line blank. If you're not an educator and not receiving IRA deductions or interest on student loans, you'll be leaving most the "Adjusted Income" section blank. If you're left with a number in Step 5 after subtracting deductions (for the subtotal) and exemptions (for taxable income) from your adjusted gross income, write that number down. Go to the tax tables in the tax booklet; find the number range in the table that contains your number. Look under the columns that represent your filing status and circle that number; that's the tax you're liable for. Place this new number in the line marked "Tax." Enter the "Tax Withheld" from your W-2 in the matching tax-form line. If this number is higher than the tax you received from the tables, the government owes you the difference. If the tax on your W-2 is lower than the tax on the table, you owe the government the difference.
• Make sure you include your Social Security number as well as your name and signature at the end of the tax forms. Follow the form instructions as to who to make your check payable to, and mail your completed tax form to the address the tax booklet designates for your area. Don't wait till April to do your taxes; file them as soon as you get everything you need to complete the tax form and mail it.

Resources

• The Internal Revenue Service website has links leading to downloadable tax forms