Federal Income Tax - An overview of Free filing, Forms 1040 and W-2 and best practices!
How to Free File Your Federal and California Income Tax Returns
As tax season comes around, you will need to find an easy and affordable way to file your federal and state income tax returns. Depending on your income, you may be eligible to use free online services that make filing your federal and state income tax returns simple and affordable. Even if your income is too high to use certain services, you may still be able to file your taxes for free by using online forms and online filing.
Filing Your Federal Income Tax Return When Your Income is Less Than ,000
Determine your income.In order to file a free federal tax return using brand-name software, the IRS requires that you have an income of less than ,000 per year (this year — this number can change). In addition, some software companies will require your income be even less.Before you can use the software, you will need to verify your income level. To do so:
- Gather income information and receipts pertaining to social security benefits, unemployment compensation, small business transactions, and real estate transactions.
- Gather W-2s and 1099s showing your annual wages, paid interest, refunds received, and dividends received.
Gather the required documents.In addition to having to prove your income, you will also need certain personal information ready before you start your filing. Before you file, you should gather and have ready:
- A valid email address, which is needed so the software company can tell you if your return was accepted by the IRS;
- Last year's tax return;
- Last year's electronic filing PIN number, if you have one;
- Valid Social Security numbers for anyone that will be a part of your tax return (i.e., dependents and spouses).
Visit the IRS website.Once you have gathered all the documents you will need and you have verified your income level, you should visit the IRS' Free File website. Once there, you will click on the link that says "Start Free File Now."
- To begin free filing, you can visit the IRS website at .
Choose a free file software.Select the best software match for you by reading through the descriptions of each company or use the "help me" tool to narrow your choices.Each company's eligibility criteria is generally based on income, age, state residency, eligibility for the Earned Income Tax Credit, and military status. If your income is less than ,000 per year, there will be at least one option available to you. For example:
- OLT.com offers free returns to people with an income between ,000 and ,000 per year so long as you are a U.S. citizen.
- H&R Block offers free federal returns if your income is less than ,500, you are under the age of 53 or you are eligible for the Earned Income Tax Credit.
- TaxSlayer offers free returns if your income is less than ,000 per year, or less than ,000 per year for active military members.
Continue to the IRS' partner website.Once you find a software company that fits your needs, you will click on that company's link.When you do so, a disclaimer will pop up letting you know that you are leaving the IRS website and going to a private site.Click "Leave IRS Site" and continue to the private site you chose.
File your tax return.When you reach the private site, you will be prompted to create an account and start your filing. Once you create an account, you will follow the on-screen instructions to complete your tax return. Once you complete your tax return, you will be able to track your refund and even have it direct deposited into your bank account.
Ask for help.If you need help preparing your tax return, the federal government provides a number of tools to individuals who qualify. For example, if you are 60 or older, IRS-certified volunteers may be able to help you with questions about pensions and retirement-related issues unique to older people. In addition, if you make ,000 or less, the IRS offers Volunteer Income Tax Assistance for free. If you use this service, qualified volunteers will help you with ta credits and will prepare a basic tax return with electronic filing.
Filing Your Federal Income Tax Return When Your Income is More Than ,000
Use Free File Fillable Forms.If your income is above ,000 per year, you will not be able to use the commercial software for free. However, you will be able to use free file fillable forms in order to file your taxes for free. When you use these forms, you will complete your tax return online using the electronic equivalent of paper forms. These forms allow you to prepare, print, and file your federal tax return for free, regardless of your age, income, or state.
Create an account.To start the process, you will create an account by clicking on the "Start Fillable Forms Now" button on the IRS website. A disclaimer will pop up and you will click "Leave IRS Site" in order to continue. You will then select the "Start Free File Fillable Forms" and hit "Continue." Then you will create an account, which you will need to do at the beginning of every tax year. Once you complete the required information, you will agree to the "Terms of Service" and select "Continue."
- In order to create an account, visit the IRS website at .
Select your 1040.Form 1040 is the federal form for filing your income tax return. There are three different versions for you to choose from depending on your situation.
- Form 1040 is the "long form" because it is the most comprehensive and in-depth.
- Forms 1040EZ and 1040A are the abbreviated versions for people with less income and deductions.
Fill out your tax forms.Once you choose the correct 1040, you will fill it out and include any additional information you need.Form 1040 will ask you about your income, exemptions, taxes and credits, as well as other payments. If you need to attach any additional forms, Form 1040 will instruct you when to do so and what forms to use.
E-File your tax forms.To file your tax return, you will need to enter your income information, which includes any W-2s and 1099s you have. In addition, you will need to verify your federal withholding and your identity (using your PIN number or last years Adjusted Gross Income). Finally, you will sign the return and file it online.
Ask for help.If you need help filing your tax returns or have questions about specific issues, the IRS offers a number of free tax services. For example:
- You can look at IRS publications that help answer frequently asked questions.
- You can call the IRS and speak to someone about the questions you have.
- You can take part in seminars and webinars offered by the IRS.
Verify your submission.Once you file your return, you will want to print a copy for your own records. After October 20, you will not be able to print your return anymore. In addition, make sure you receive two emails within 24 hours to confirm receipt and acceptance or rejection of your return. Once you file, you will be able to track your refund and see when you will get your money.
Filing Your California Income Tax Return
Visit California's Franchise Tax Board website.All California tax returns are handled by the California Franchise Tax Board (FTB). The FTB website offers a number of free options for filing your state income tax return. Visit the FTB website and click on the link that says "Other Free Options." A number of free options will pop up on your screen.
- To get started, visit the FTB website at .
Look at their free filing options.Look through the different options in order to determine each option's eligibility requirements. For example:
- AdvanceTaxReturn.com offers free state tax filing if your federal adjusted gross income is ,000 or less and you are a California resident.
- DIY tax is free and has no eligibility requirements.
Be aware of hidden costs.Before you choose a service to use, look for hidden costs associated with the particular service. For example:
- e-File-Tax-Returns.org offer free state tax filing but only if you pay to file a federal tax return. In addition, they will charge you to print a copy of your state tax return and will charge you to store data for future filings.
- ezTaxReturn.com offers free state tax returns so long as you purchase their "Guide-Me" interview program to file your federal return.
Choose the option that fits your needs.Once you know the eligibility requirements and hidden costs associated with each service, you will be ready to choose the service that will work for you. To choose an option, click on the link provided on the FTB website, then click the button provided to use the service.
- Once you click on that button, you will receive a disclaimer stating that you are leaving the FTB website and are going to a private site.Click "Continue" to go to the service's website.
Complete your state return using the company you chose.Once at the service's website, you will need to follow the on-screen directions in order to complete your state tax return. Each website will be different but in general you will need to create an account and provide the service with certain information regarding your identity, income, and deductions.
Ask for help.If you are having trouble filing your California income tax return, the state offers a number of free resources. For example, if you are 60 or older, you can take advantage of the Tax Counseling for the Elderly, which will help you with tax questions related to pensions and retirement.In addition, certain low income individuals may qualify for California's Voluntary Income Tax Assistance program, which allows individuals to ask for help from qualified volunteers.
QuestionHow do I confirm the receipt of a tax return?Top AnswererMail the return at your local post office, and request a return receipt.Thanks!
QuestionAm I able to mail in my tax returns for California?Top AnswererThanks!
Is inheritance money taxable and where to report it?
How should I file if I only made ,000 for the year?
Video: How to Do Your Federal and state Taxes for Free
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