It’s Tax Season (Don’t Sweat—This Guide Will Help You Through It)
There comes a season in the year that almost everyone dreads…tax season. Even if you stand to gain a healthy return from getting those taxes filed on time, the prospect of an accidental slip up or even (*gasp*) an IRS audit can be paralyzing.
To fight off the intimidating shadow in the distance, we’re here to answer all of your questions and point you down the right path. With this trusty article as your guide, we guarantee that you’ll make it out of the woods alive (and more well-informed than ever!) this season.
- How much do you have to make to file taxes?
Whether you are legally required to file an income tax return depends on a number of factors such as your income, your filing status, your age, and your dependency status. Generally, you will need to file a return if your total income was more than your standard deduction because that is the level at which you start to be liable for income tax.
The following threshold chart for 2020 taxes from Policygenius provides benchmarks for the minimum filing income across a number of groups. If your gross income for the year falls above these thresholds, you are legally required to file taxes.
Even if you’re not required to file, you will still want to file in order to get a refund of any taxes you already paid during the year and to claim any refundable tax credits for which you qualify.
|FILING STATUS||AGE||GROSS INCOME|
|Single||65 or older||$14,050|
|Married filing jointly||Both spouses under 65||$24,800|
|Married filing jointly||One spouse 65 or older||$26,100|
|Married filing jointly||Both spouses 65 or older||$27,400|
|Married filing separately||All ages||$5|
|Head of household||Under 65||$18,650|
|Head of household||65 or older||$20,300|
|Qualifying widow(er)||Under 65||$24,800|
|Qualifying widow(er)||65 or older||$26,100|
- When is the tax filing deadline?
For tax year 2020, the original deadline to file your taxes was April 15, 2021. The deadline has since been extended due to the pandemic to May 17, 2021.
You won’t want to miss this deadline. If you do, the IRS will charge a failure to file penalty fee against you equal to about 5% of the unpaid tax amount.
You can get more time to file your taxes without facing a penalty fee by filing for an extension. Regardless of income, you can use Free File to electronically request an automatic tax-filing extension. All you have to do is submit the extension request before April 15, and you will be allotted six additional months to file your taxes. Just make sure to pay before that October 15 extension deadline!
- What materials will I need to successfully file my taxes, and how long will it take?
We recommend having the following materials ready when it comes time to file your taxes:
• Social Security Number (SSN)
You will need your SSN and the social security number for your spouse or any dependents.
This is a form that your employer uses to report how much income you earned and how much you paid in taxes.
• A 1099 Form
This is a form used to report money that you have earned outside of your employer (from investments, for example).
• A 1098 Form
This is a form used for interest payments and expenses that you can deduct from your taxes.
• Any Receipts Or Documents Related To Your Income
These can be from other forms of income outside of your main employment. You may also need documents related to health care/insurance, employment, moving, and other expenses.
• Last Year’s Tax Return
Last year’s tax return will have your adjusted gross income (AGI) that you will reference on your current tax return. This helps the IRS verify your identity.
• Your Bank Account Number And Routing Number
You will need this information to receive any refunds from the IRS through direct deposit.
• Documents For Any Taxes You Have Already Paid
This can include things like estimated tax payments, property taxes, or state and local income taxes.
• Charitable Donation Documents
Some of these donations are tax deductible.
- What are some services I can use to file taxes?
We know how overwhelming it can be to file your taxes. There are many ways to receive support in this process, and a variety of services that you can use to make it easier.
If you’re not for the traditional snail-mail tax return route, e-filing may be the way to go. Almost 89% of individual tax returns for the 2019 fiscal year were filed electronically, and you can follow suit with all of the tried-and-true options we’ve listed below.
A few have brick-and-mortar locations that you can visit in-person if you’d rather receive face-to-face (or should we say, mask-to-mask) assistance. Whether you file online or in-store, remember that you can split the service fee in 4 with Quadpay!
TurboTax offers free and low-cost options to file simple tax returns online. There are a number of tiers available for those who are self-employed or prefer deluxe or premium support. Their intuitive platform is a popular pick, with an overall rating of 4.6/5 stars from Business Insider and 4.5/5 stars for their free plan from NerdWallet.
QuickBooks is the perfect option for anyone who runs their own business or has multiple side hustles. They can help you file for it all, whether you are running an Etsy shop or driving around town for Uber. They have many tools to help you save more in the future, with packages ranging from $7 for self-employed gigs to $75 for an advanced business plan.
Jackson Hewitt offers online and in-person support with locations at more than 6,000 Walmarts across the United States. Their online services cost $25 for federal filing support regardless of your tax status, and $49 for federal and unlimited state filing support.
4. H&R Block
You can file your taxes online for free with H&R Block, and you have the option to get in-person support at one of their 11,000 retail stores across the United States. Staff across all locations are taking the necessary and proper COVID precautions so that they can provide in-person tax support safely.
- Do I need to hire a tax firm or specialist to help me file?
Not necessarily; but if you don’t have a lot of time and you’re overwhelmed by the idea of figuring it out yourself, it may be helpful. The services listed above are typically sufficient for helping anyone easily file their returns.
If you are in a complex tax situation or your tax situation has drastically changed since last year’s filing, it may be best to seek out additional support.
- When will I receive my tax refund?
If you have filed your taxes by mail, the timeline for your return will be longer. If you signed up for direct deposit, you can expect to see a refund in your account around one month from the date that the IRS receives your return. If you opted for a check, expect to receive your refund around two months from this date.
Armed with this information, we promise that you’ll make it through this tax season without breaking a sweat. If you have a pattern of missing deadlines, like say, not paying off your credit card on time, this is the perfect opportunity to wipe the slate clean. In other words: break the cycle of procrastination and get ’er done!
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Quadpay’s editorial content is not written by a financial advisor. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.