Tax Day is Coming (Part 2): How to File (Fast!)

With only one week left until tax day (April 15th), it’s perfectly natural to feel a little panicked about filing your taxes. Don’t worry, though. Even if you’ve waited until the last minute, you can file your taxes stress-free!

Ryan P. Cleary
Money Matters
January 28, 2022

Originally posted on April 8, 2019

With only one week left until tax day (April 15th), it’s perfectly natural to feel a little panicked about filing your taxes. Don’t worry, though. Even if you’ve waited until the last minute, you can file your taxes stress-free! 

If you filed your taxes last year and you want to know what’s changed, we’ve got the perfect article for you. Otherwise, let’s get started. The quicker we get into the article, the quicker you can focus on getting those taxes done.

Step #1: Gather your documents

Since January, you should have received several documents outlining your income throughout the year. Common documents include:

W-2: A form provided to employees by their employer that includes salary and tax information.

Form 1095: These information forms show that you had health insurance coverage in the prior tax year. They include:

  • 1095-A: Health insurance marketplace statement
  • 1095-B: Health coverage
  • 1095-C: Employer-provided health insurance offer and coverage

Form 1098: This form is provided if you paid less than $600 on mortgage interest throughout the previous tax year. This may help you to receive a tax deduction or credit. There are also two special types of Form 1098:

  • 1098-E: If you have student loans and paid off a portion of the interest, you’ll receive a 1098-E from each of your loan servicers. This will help you to receive a tax deduction credit.
  • 1098-T: For people who were enrolled in classes from an accredited institution, a 1098-T shows how much you paid and how much you received in grants. This can help you to determine eligibility for tax credits and deductions.

Form 1099: These forms are provided to outline income that wasn’t received as a W-2 employee. They include:

  • 1099-DIV: A form providing information on dividends and distributions that you received
  • 1099-G: Certain government payments
  • 1099-INT: Keeps track of interest income earned on investments
  • 1099-OID: Provided if you received more than the stated redemption price on maturing bonds
  • 1099-Q: Payments from qualified education programs such as a 529 savings plan
  • 1099-MISC: Miscellaneous income, often received as an independent contractor, through self-employment or from prizes/awards

In addition to these tax documents, you should also gather the following:

  • Personal information for everyone included on your tax return. You’ll need social security numbers and if you or they don’t have one, you’ll need a TIN.
  • Your tax filing from last year (if you filed).
  • If you own a business that operates as a pass-through entity (sole proprietors, partnerships and some limited liability companies or s-corps), make sure that you have a summary of expenses and income available, along with mileage records and quarterly estimated tax payments (if applicable).
  • If you have an IRA that you contributed to, you’ll need a Form 5498.
  • Receipts for unreimbursed medical expenses. These could include exams, surgeries, preventative care, prescriptions, glasses, braces and more!
  • Records of charitable donations.
  • Property tax receipts.

Step 2: Start the filing process

Now that you have all your documents together, you can start the process of filing! Most of our readers won’t need a certified public accountant (CPA), but if you feel uncomfortable filing your own taxes then it can be worth looking at for your own peace of mind. Just note that by this point in the year, many CPAs are already fully booked.

Before you pay for expensive tax software, check whether your income was below $66,000 last year. If so, you should visit the IRS free file software page, which has full versions of popular tax software that are free for qualified filers. Some of these software products even include state filings! They also typically have more features than the free versions that are available directly from company websites.

If you made more than $66,000 last year but are comfortable filing your own taxes, you can go to the IRS free fillable forms (which have become simplified compared to past tax years) and file your tax return online.

Finally, if you made more than $66,000 and are willing to pay, there are many great tax software options available for purchase online.

Step 3: File your federal taxes or request an extension

Congratulations! You’re either finished or mostly done but just waiting on a form or two. If it’s the latter, you can request a filing extension from the IRS. 

Extensions aren’t meant to be a way for you to put off paying your taxes, and if you underpay, you can still be hit by penalties. You should have a good estimate of what (if anything) you owe and make sure that’s paid first. An extension provides you with extra time to send in your full tax filing, so it’s potentially safer to be cautious and to overpay and then receive a return later.

You can either file a Form 4868 to receive an extension or you can use direct pay, the electronic federal tax payment system or a credit or debit card to have a confirmation number and later amend or submit your full return.

Step 4: File state and local taxes (if applicable)

Not everyone will need this step (hi, Texas!), but if you’re based in a state that has income taxes, you’ll need to file at state level and possibly also at the local municipal level. Make sure you do so, or you might be hit with late fees. If you own a business or are self-employed, you may also have taxes due, even if you’re in a non-income tax state. If you moved during 2018, you may have to file in multiple states!

Step 5: Relax

You’ve made it through another tax season! Celebrate by putting a copy of your tax return in a safe place (maybe two or three places?) and spend some time with family and friends. You’ve earned it. 

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