How do I prepare my US tax return? 

If you are wondering How do I prepare my US tax return? The best way to do it is through free tools offered by the Internal Revenue Service (IRS). This way you can lighten your stress and reduce the margin of error.

The first thing you should do before filing your tax return is to know how much money you earned during the year you will file. After that, you have to analyze if it is more convenient for you to make the standard deduction or if the best option for you is to make an itemized return.

After resolving all these points you will be able to focus on How do I prepare my US tax return? No errors in the process that can lead to delays in refunds.

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Discover How do I prepare my US tax return?

The federal tax return can generate frustration in many, and is that not many are fluent in this type of issues, and that is why they usually pay for it, but currently the IRS offers free tools that alleviate the process.

So, here’s how do I prepare my US tax return?

It is important to monitor your income

Individuals who must file a tax return are those who meet or exceed certain income levels during the year.

While employed people should look on their pay stub for income up to the required date, people who have more than one job need to add up their income from all of their employers.

It is also important to include income from other sources, such as if you earn money from rental property, sales, investments or interest.

You should keep the documentation you need for your tax return throughout the year.

It is essential that you keep track of your tax documents throughout the year. This makes it easier for you to prepare the documents during tax season.

You can keep receipts, charitable donations, work-related expenses and medical bills. Similarly, statements for student loans or grant or scholarship investments are important in determining whether you should qualify for the standard deduction.

It is important for you to know that the IRS recommends keeping a record of documents and bills for at least three years.

Pay special attention to the arrival of your income documents.

If you are wondering How do I prepare my US tax return, you should know that you should receive your income forms in January or February, especially the amount of income you receive from your employers and other sources of income.

Those who are full-time employees receive the W-2 form, which details everything about their income and the taxes that were withheld. Individuals who are self-employed or contract workers will receive a 1099-NEC form, which lists what you earned for the year; you may also receive dividends or interest earned on investments (on 1099-DIV or 1099-INT forms).

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Interest paid on a student loan is Form 1098-E, while if you are a college student or have a dependent who is a college student, you will receive Form 1098-T, which shows tuition payments and grant or scholarship receipts.

Find out what credits and deductions you can get.

It is recommended to have an idea of the credits and deductions that suit you, this way it will make it easier for you to gather the corresponding documents. Here are some of them:

The saver’s credit, if you are not a full-time student and are not claimed as a dependent, you might qualify for a tax credit as long as you contribute to a retirement plan.

It depends on the state the amount of the credit and your adjusted gross income. Individuals listed in single filing status may qualify, depending on their gross income. For married individuals filing jointly, they may also qualify depending on their annual income.

Donation deductions, those who donate money to charitable organizations or to their alma mater, may qualify for the charitable donation deduction, as long as they itemize their taxes.

Self-employment expenses, people who are self-employed have the possibility of claiming deductions for expenses related to their work. Such is the case of subscriptions related to industries or even office supplies.

It is essential to pay attention to the deadlines

When you receive your tax documents in January or February you have approximately two months to file your tax return before the deadline which is normally April 15.

Therefore, it is advisable to file your tax return as soon as possible, with the intention that you do not miss the deadline and end up paying a penalty. It is also good to keep in mind that the earlier you file your taxes the less chance you have of having your identity stolen or if you expect a refund you will get it much sooner if you file your returns on time.

How do I prepare my US tax return? How should I file?

There are several options for filing a tax return and we will tell you what they are:

Filing a tax return is free, if your gross income is below a certain limit, the IRS has a free application that can make it easier for you to file your return, where they help you determine deductions or credits.

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Online IRS forms, if your gross income is over the limit, there are electronic versions of the forms that will help you do the math. However, they only offer basic guidance, so they don’t help you determine what deduction or credit you’re eligible for.

Tax preparation software, if you need more guidance, there are online tools you can pay for. These tools offered by vendors will explain how to prepare your tax return and what deductions and credits you may be eligible for.

Tax preparer, for people who need personalized help, it is good to turn to an expert. It is important that you choose the right person to help you because you will have to give them confidential personal information. The IRS has directories of tax preparers who may be able to help you.

After learning about How do I prepare my US tax return, are you ready for tax season?