Can I File an Income Tax Return Myself?

Knowing how to file your income tax return is not just one of the essential financial skills, it is also a great way to stay in line with tax regulations.

Disciplining your financial affairs and adhering to tax rules is essential. It aids you in being financially stable, and planning and even evades legal actions and expensive fines.

Stay with us as we make this process of filing your income tax return easy for you. We will also help you in every step, right from gathering the documents to choosing the best filing method.

How to File Your Income Tax Return

Generally, taxpayers can file their taxes for free through the IRS website or the IRS2Go app.

IRS Free File Program, accessible through IRS.gov, is a free service provided by well-known tax preparation software for eligible taxpayers.

1. Gather Your Documents

Organize all your income documents, including W-2 forms from your employers, as well as any other earning or interest statements (like 1099 and 1099-INT forms).

Remember to keep receipts for expenses that are deductible on your taxes, such as charitable contributions, mortgage interest, state and local taxes, and medical and business expenses.

If you plan on itemizing your return, you can claim these deductions.

2. Select Filing Status

Whether you’re married and how you pay for the household expenses determine your filing status.

This status is what differentiates the tax rates and standard deduction that you qualify for.

3. Decide on the Proper Way to File

The IRS is recommending that people use the tax preparation software for e-filing, as it provides accuracy and quicker refunds.

Moreover, if you’re in one of the 12 states with a standard tax return, you may be eligible to file online for free through the IRS Direct File pilot program.

If you are a fan of the old-fashioned way of doing things, you can file by mail, but you must bear in mind that paper returns take longer for the IRS to process.

4. Standard Deduction vs. Itemizing

Figure out if you would prefer the standard deduction or itemized deductions.

Often, if your itemized deductions exceed the standard deduction amount for your filing status, itemization will be more beneficial for you.

5. Payment Options

If you have tax liabilities, you need to consider different repayment methods. You can also make payments online, and if you need it, you can apply for a payment plan too.

The other way is by check or money order. Please double-check that you are sending the money to the correct address.

6. File by the Deadline

Ensure that you mail in your tax return on time to avoid penalties.

The due date is of high importance as it relates to the penalties and interest charges, therefore, it is essential to meet this deadline to prevent any further costs.

What’s the Consequences if You Fail to File a Tax?

If you are late in filling out the tax form or you don’t pay the full taxes by the deadline you may incur a penalty.

Here’s how they’re calculated:

1. The Failure to File Penalty

The penalty is 5% of taxes due per month or part of a month your return is late and can be as high as 25% of the unpaid taxes.

Failure to pay penalty which is due in the same month of Failure to File penalty is the only case where the amount of Failure to File penalty is reduced by that amount.

2. Non-payment of Penalty Fine

The Failure to Pay penalty will be charged to you additionally if you fail to pay the entire sum of your taxes before the due date.

This penalty will be imposed for the whole period of the unpaid tax starting from the due date and ending with a maximum of 25% of the unpaid tax.

3. Minimum Penalty

You will be charged the minimum penalty if your tax return is more than 60 days past due.

This penalty is either at a minimum predetermined amount or 100% of the total tax underpayment, whichever is lower.

Is Interest Charged on a Penalty?

Yes, fees are also incurred as a result of the penalties.

The date of your penalty being charged with interest is determined by the kind of penalty.

This is a continuous process that seems to be never-ending, until and unless you have paid off the whole sum that you owe.

If you want to take a deeper look at how interest affects the penalties, read the Interest section in detail.

Can a Penalty be Cancelled or Reduced?

If you have been penalized due to tax obligations, there are chances that we could erase or reduce the penalties as long as you can show good faith.

The only thing that you need to do is to give a reason why you could not pay your tax-related responsibilities.

On the other hand, the usury law prohibits these financial institutions from reducing or even eliminating interest rates.

This can only be possible if the penalty is also reduced or removed by the same act.

How Can I Dispute a Penalty?

In the case that you believe that the amount of the penalty is wrongly calculated, you have the right to dispute this.

Filing your income tax return doesn’t need to be overwhelming. Just follow the steps mentioned earlier and keep things organized. This will help you have a smooth and stress-free experience.

Make sure you sign your letter and include any necessary documents. Also, remember to send the correspondence to the address provided in the letter or notice.

When reaching out to them, make sure you have the following information readily available:

• The notice or letter reference number we sent you.
• Specify the penalty you wish them to reconsider.
• Provide a clear explanation for each penalty, detailing why you believe it should be removed.

If you didn’t receive a notice or letter, you can still seek assistance by contacting them via telephone.

Filing your income tax return doesn’t need to be overwhelming.

Just follow the steps mentioned earlier and keep things organized. This will help you have a smooth experience.