How to self-file a tax return in the US: 10 important tips

“There is nothing inevitable in life except death and taxes,” according to historians, this is what Benjamin Franklin, one of the authors of the US Declaration of Independence, said. This phrase is relevant now more than ever. By April 17, 2018, American residents must submit their tax returns (Tax Return) for 2017. The most important advice in this case is to be careful and do not relax even when sending the declaration by mail, because if the address on the postal envelope is written incorrectly, it is considered that you did not send it on time. ForumDaily has prepared answers to 10 important questions for those who want to file a tax return on their own.

For a newcomer, the delivery of a tax return may seem overwhelming, but if you carefully study the tips, you can fill in the declaration yourself. Depositphotos.com photo

1. Fill yourself or with an assistant?

You can fill in the tax form, count, collect documents:

• contacting a tax consultant (his work can cost from $ 50 and above);
• with the help of an electronic assistant service (these services also cost money and cost, on average, $ 25, the IRS recommends TaxAct);
• independently.

For a newbie, filing a tax return can seem like overworking. But, according to the tax consultant from California, Maria Shkarlat, in very simple cases, a person can spend very little time and fill out the declaration himself. "If you lived in the US for more than 183 days a year, you have an SSN / ITIN, the status is correct (single, married filing jointly / separately or head of household), the source of income is determined by the W2 form and there is no other income, there were no investments, real estate transactions, foreign investments, and there was permanent health insurance, then in this case it is enough to use the recommended IRS software and file the declaration yourself,” says she.

However, if you are not confident in your abilities, it is better to seek professional help from tax advisors.

To facilitate the work of those who still will file the declaration itself, a special tax calculator. It gives you the opportunity to calculate how much tax you need to pay in your particular situation, taking into account income, marital status, state of residence.

If your annual income is no more than $ 54 thousand, you are entitled to a free assistant. In a programme Volunteer Income Tax Assistance Tax specialists participate and help people with low incomes, people with disabilities and those who do not speak English fill out their returns free of charge. The volunteers you can trust are all IRS certified and will work with you to complete and electronically file your taxes step-by-step for free.

Older people help volunteers, regardless of income. Tax Counseling for the Elderly - a program designed for those over 60. Volunteers take full responsibility for filling out and submitting the declaration, as well as assistance in preparing the documents necessary to fill out all forms.

IMPORTANT: If you fill out a declaration with a volunteer, and at the same time submit a declaration with your husband / wife, you need to be two people to fill in to sign all the forms. To find out where the volunteers nearest you are, just enter your ZIP Code on Onlinewhere data is collected about these programs, or call: 800-906-9887.

If you earned $62 or less, you can take advantage of other IRS help: free software for tax returns (Free file). The system allows you to step by step fill out the form and submit it via the Internet. Access to this system is on the site. IRS. There is also a detailed step by step instruction by filling it out.

IMPORTANT: All federal forms needed to complete your tax return are free. This applies to employees, self-employed people, and small business owners.

2. What are the declarations?

There are 2 types of declarations - federal and state declaration. They can be served at the same time, but they are processed separately from each other. The software sorts them and sends them to the federal Tax Service (Internal Revenue Service, or the Internal Revenue Service), and the state declaration - to the state tax authority. That is why refunds for overpaid taxes come at different times. But to get a return, you must first report on the earnings. And note that in US taxes are levied on all income, including illegal. You need to declare not only income in the United States, but also foreign accounts and investments. For non-declaration - fine.

3. What taxes need to be paid?

In America, income is taxed:

a) federal income taxwhich is the same across all states and is calculated from the table. The table is selected depending on your status, that is, whether you fill in the declaration alone, with your wife / husband or as a single parent.

Tax consultant Maria Shkarlat explains: “The process of determining taxpayer status is described in Internal Revenue Code. In the case of couples, this status is determined either by a contract between the spouses (for example, a separation agreement), or by some necessity (for example, politicians' spouses do not want their incomes published and prefer to submit information about them separately). Tax rate for spouses filing a declaration jointly (married filing jointly) significantly lower than the rate for a separate submission (married filing separate). "

b) your state income tax - in some states it is equal to 0%: these are Texas, Wyoming, Nevada, Alaska, Washington, South Dakota, Florida.

c) contributions to the social fund (Social Security Tax) - they make up 7,64% of income. This tax is usually deducted from the salary by the employer himself. But if you work for yourself, then Social Security Tax amount to 15,3% of income.

d) Medicare (contributions to the medical fund) - it is the same as Social Security Tax, the employer deducts from your salary. Health tax is 1,45%. If you are your own boss, then pay 2,9%.

4. And you can not submit a declaration?

If you are an entrepreneur, then the mandatory income to declare starts from $400 per year, if you are an employee - from $10 thousand. But there are nuances here too. For example, if you are married, the income required for declaring starts from $ 20 thousand. Or if you earned nothing at all, but sold real estate in the year for which you report, then you must show this income in the declaration.

It is necessary to submit a report to the tax service, even if the employer withheld taxes himself and issued a “clean” salary. In this case, in your annual report you need to indicate how much taxes you paid last year and whether there have been any changes in your life that concern the IRS (you had children, you became disabled, you took out a home loan).

5. I do not have time to date and have nothing to pay. What to do?

If you already know today that you won’t have time to file your declaration by mid-April, it’s worth making sure that not only you know about it. The correct action is to submit by April 17 Form 4868 — a request to extend the deadline for filing a tax return. Once you submit this form, the filing deadline will be extended by six months. But this does not mean that your tax payment deadline will also be postponed. Federal tax on profits received by individuals in 2015 must be paid by April 17 inclusive.

If you know that you cannot pay taxes, you should also inform the IRS about this. In order not to turn you into a debtor, you will be offered a scheme of paying taxes in parts (Installment agreement). Before you decide how much you can pay, think twice. If you later want to change your payment plan, you will have to pay $50. There is a fee ranging from $43 to $120 when entering into an installment agreement. To clarify the amount and additional information about paying taxes in installments, you can call: 800-829-1040. One condition for an installment agreement: you must not be in the process of filing bankruptcy.

6. What do the main tax abbreviations denote?

There are 3-type identification numbers, which are abbreviated: SSN, ITIN and EIN.

SSN - Social Security number, taxpayer identification number. It must be reported on each individual income tax form.

ITIN — individual taxpayer identification number. It is received by those who are not US residents. To obtain an ITIN, fill out an application form W-7. It should be applied to the original of your tax return and sent to the address specified in the W-7 form. To get the form you need to register on the site IRS or call toll free: 1-800-829-3676.

ON — employer identification number. If you paid at least one employee in the past year, you are already an employer and must purchase an employer identification number. Obtaining an EIN does not replace the need to obtain an SSN - both of these numbers will need to be provided when filling out the declaration. You can get an EIN on the website IRS. As an employer, you need to know the SSN of each employee.

Tax consultant Maria Shkarlat explains: “An EIN, despite its name, can be obtained by anyone - for example, a tennis coach if he does not want to indicate his SSN on his accounts. You can only get one EIN per SSN.”

W-2 is a document that contains complete information about your salary and taxes paid. The employer gives it to you. Form W-2 is the main document for your tax refund. But if you only had federal tax withheld, you can file without waiting for your W-2.

1099 MISC is a form that is sent to anyone who has received more than $600 in income from one source. For example, for his home kindergarten, an entrepreneur hires a cleaner, to whom he paid $650 during the year. The entrepreneur must send the cleaner a 1 MISC form by February 1099 of the following year, which will indicate the entire amount for the year. And the cleaner already uses this data to declare her income.

7. What documents to prepare?

Before you begin to fill out a tax return, make a list of documents that you will need:

1) W-2 and 1099 MISC forms that will be mailed to you.

2) Last year's copy (for example, from 2016 of the year, if we submit for 2017) tax return if you have already filled it out.

3) Reporting documentation: receipts, documents confirming income, canceled checks - everything you want to indicate in the declaration.

4) All information on local taxes paid and local tax refunds received.

5) Vehicle registration documents and other documents confirming the payment of local fees.

6) Medical bills if medical expenses have exceeded 10% of annual income.

7) If you are filing electronically, read in advance 8453 form. It is useful in order to submit printed documents in electronic form. In this form it is clearly spelled out exactly how to file and declare receipts, checks, etc.

8) If you are filing a tax return electronically, you will also need an electronic signature. To create it, you need information about your own date of birth and the income that you indicated in the declaration. If the declaration is filed with the husband or wife, then everyone needs to make their own signature.

If you have already done such a code last year, you can use it this year. But if you forget it, you can make a temporary personal identification code in a special section IRS website or by calling the toll-free number: 1-866-704-7388.

9) If dependents appear in your declaration, you should know their social security numbers (SSN). Accordingly, if the dependent does not have such a number, it cannot be included in the declaration.

10) Bank statements with information on interest income and dividends (Interest and dividend statements, 1099 forms).

11) Numbers of bank branches according to the classification system operating in the USA (routing number), and account numbers in these banks for bank transfer.

If you are eligible for any tax credit, you must also have relevant documents. All tax records must be kept for 4 years after paying taxes in case of an audit.

8. Where and how to submit a declaration?

Tax declaration can be submitted electronically on the website. IRS or send by mail. If, when filling out an electronic declaration, you are clearly indicated in what order to submit one or another document, then in paper form you need to strictly observe all the nuances.

For example, if you file an individual income statement (Form 1040), then UNDER it is necessary to put all forms in order: the sequence numbers are indicated in the upper right corner of each form. On top of the form 1040 need to put a copy W-2 Forms. If changes were made to the W-2 form, then the W-2c form will be sent to you by mail. In this case, you need to attach the form W-2, and the form W-2.

If the employer withheld federal income tax over the course of 2015, attach the form TOP W-2G, and ON it - the form 1099R.

The address to which you want to send documents can be found on the interactive map on the official website of the tax service.

If you decide to send a joint declaration with your spouse, but he / she, for example, is not in the country and he / she cannot sign the declaration, be sure to issue a power of attorney to sign documents for him or for her. If the declaration needs to be submitted as a child, instead of the signature, write the degree of relationship, the name of the child and the word by (which means “signed”).

Do not forget that after filing your tax return you need to print and save it. If you forget to do it right away, then in the IRS you can order an extract from your declaration. This service is free. The same statement can be obtained if you have not submitted a declaration at all. This kind of request can be requested after 15 June.

If you want to get not a statement, but a photocopy of the original declaration, this service costs $ 50, and to receive it you need to fill Form 4506which should be mailed.

9. How to pay taxes?

If your tax return is submitted in paper form, you can attach a check or a money order (read below for how to process it). The IRS, based on its experience, warns that taxpayers should not put money in the return envelope.

If the declaration is submitted online, fill out the payment voucher (Payment Voucher) and 1040-V form. In them you will provide information about the check or transfer to the desired amount.

Fill Payment Voucher You need to follow the rules: indicate your name, surname, address, SSN, ITIN, EIN, tax year, type of form that is submitted, and telephone number on the payment document. As a recipient, specify United states treasury. If the payment and the 1040-V form are sent by mail, you just need to attach them to the declaration and in no case fasten it with a stapler or paper clips.

You can pay taxes with a credit or debit card if you fill out a declaration with free tax filing software. Recall that Free file can be used if you earned no more than $ 62 thousands. In the software manual there is a section on payments, which describes in detail how to pay taxes using Flashcards by phone or online, or from your bank account. Please note that if you pay with a card, an additional fee of $ 2.50 or higher (up to 2.25% of the amount) is charged, depending on which card is being calculated.

10. When will the money be refunded if you overpaid taxes?

After the IRS receives your tax return (via 24 submission hours in electronic form or 4 submission weeks by mail), you can personally in the system make surethat the refund of overpaid taxes is well received. A refund is usually paid during the 21 day. Developed official mobile app, with which you can follow the update of information on tax refunds.

If you received a letter from the IRS after sending the tax return, you should not be scared right away: perhaps you shouldn’t have to, but you have to return overpaid taxes, or you have found errors in filling out the declaration and made changes to it. Or maybe the IRS wants to additionally verify your personal data or inform you that your declaration has not yet been reviewed and will do it a little later. By the code that is listed on the letter, you can immediately understand why it was sent. From year to year these codes may change, so it’s best to check the most up-to-date information in explanatory section official website of the tax service.

If you have any questions after reading the letter, look in the upper right corner. Here is the phone number of the department that prepared the letter. Do not call right away; you need to prepare for the conversation and have copies of all documents that were mentioned in the tax return. If you respond in writing, don't expect an immediate response—the IRS reserves the right to take 30 days or longer to respond.

From the Editor: Please note that this material is not a tax advice, and is for informational purposes only. Also note that this information may become outdated over time.

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