Tax Day is April 18 this year. If you haven’t already tackled your taxes for 2016, it’s definitely time to get started.
For the thousands of Americans filing taxes for the first time in 2017, the process can be surprisingly time-consuming and annoying. Here’s a quick eight-step guide to paying your taxes.
1. Collect Documentation
Starting in January, you will begin receiving tax documents in the mail from employers and other organizations. These documents include forms such as W-2, 1099 and 1098 forms. Keep all of your tax documents together and in a safe place until you begin filing.
2. Choose A Method For Filing
The easiest method is to pay a tax professional from a company like Liberty Tax Inc (NASDAQ: TAX) or H & R Block Inc (NYSE: HRB) to file your taxes for you, but that method typically costs between $150–$300. Another method is to prepare your taxes by using tax software such as Intuit Inc. (NASDAQ: INTU)’s TurboTax. The final method you can use is to simply sit down and fill out your tax forms yourself.
3. Determine Which Forms You Need
If you’re filling out your own forms, you’ll first need to determine which forms you need. The standard personal income tax forms are forms 1040, 1040EZ and 1040A. However, you may need to include any number of additional schedules and other forms as well.
4. Obtain Instructions
Unless you are a tax professional, you will likely need to follow the detailed line-by-line instructions for filling out your tax forms. Tax form instructions include calculations, worksheets and tables, so make sure you are confident with your ability to navigate your way through.
5. Determine Your Deduction Type
Most young people don’t have enough tax-deductible expenses to warrant itemized deductions, but some certainly do. If you are unsure whether or not it makes sense to itemize your deductions, the IRS has a FAQ page on deductions here. For most people, the standard deduction is the best and easiest option.
6. Carefully Follow The Instructions To Fill Out All Required Forms
The process may be long and tedious, but if you follow instructions closely and perform calculations carefully, you should have no problem getting your taxes done in a few hours.
7. Determine What You Owe
The last (and most important) step in filling out a 1040 form is calculating how much you owe the IRS. If the number is positive, you will need to include a payment with your tax filing. That payment can be made via check, credit or debit card or direct transfer from a bank account. If you overpaid in taxes throughout the year, you are owed a tax refund and the IRS will send you a tax refund in the mail sometime after they receive your completed filing.
8. Mail Your Tax Return
After double-checking to make sure all forms are included and filled out completely, determine where you need to mail your forms by going to the IRS website or looking for mailing addresses in the 1040 instruction booklet. Make sure to include enough postage when you mail your documents because thick or large envelopes will require more than just a single stamp.
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