- 1). Gather together evidence of all your income. Your employer will send you a W2, which is a record of your earnings. If you're an independent contractor, you will receive one or more form 1099s, which is also a record of your earnings. If you have income-earning investment accounts, the company that manages your investments will send you a record of earnings, and if you own stocks, each company will send you a dividend statement.
If you own a business, your receipts document your income. Don't forget to count cash that people may have paid you. - 2). Decide which form to file. There is a short form for people who don't itemize, and there are longer forms for people who itemize their deductions. Doing so helps them to lower their tax bill. If you have enough deductions because you own a business, you will want to itemize your deductions. If you're not sure which form to use, consult with an accountant, especially if you own a business.
If you own a business, you will also need to fill out a Schedule C. - 3). Hire an accountant to do your taxes for you if you are itemizing on the long form 1040 for the first time. The American tax code is complex and it changes from year to year. Accountants charge a fee to do your taxes, but they will also explain everything to you so that you can learn to do them on your own.
- 4). Be ready to show receipts for all your business-related expenses. You or your accountant will have to add them up and categorize them on a Schedule C, so that you can use them to lower your taxes.
- 5). Fill out your Form 1040 and any related itemized schedules. Again, have an accountant help you if you don't know what to do. Attach your W2, 1099s or other official income statements to your form 1040. You now have a completed tax return.
- 6). File. You can mail your tax return or you can file online. If you are die a refund because you overpaid your taxes (many people do), filing online may get your refund to you more quickly. If you owe taxes, you can make out a check to the IRS or pay online with a debit or credit card.
The IRS website has information on how to file online and also a list of addresses to which you can mail your tax return.
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