Income tax filing, perhaps, is the most critical and challenging task an eligible individual or business has during the tax season. Once you go through the tedious tax preparation process, the next step is to file them.
You can do so through mail or file them electronically. However, you must know the advantages of both modes to choose the right one.
Another vital thing to know is that income tax filing doesn’t always have to cost you money.
In this blog, we will discuss the different ways you can use to file your taxes for free and paid. But before we start, let us go through the prerequisites for income tax filing.
Pre-Requisites to Income Tax Filing
As the month for income tax filing approaches, the taxpayers start collecting the essential documents and calculating the due tax bill.
However, you need proper research to know your eligibility, tax bracket, tax rate, and applicable tax deductions and credits, among other things.
Moreover, business taxation starts as early as the beginning of the financial year with strategic corporate tax planning.
Finding the right tax services or accountant to prepare your taxes is another hassle. Therefore, one must take a systematic approach to planning and preparing taxes before income tax filing.
You must take caution to ensure the accuracy of tax returns for a maximum tax refund.
Let us take a detailed look at these aspects one by one before diving deep into the income tax filing procedure.
When Should You File the Income Tax Return?
You can only plan a rough timeline for preparing and filing tax returns if you know the timing for income tax filing.
The duration for filing the income tax depends on whether you are a calendar-year filer or a fiscal-year filer.
Calendar Year Filer
For calendar year filers, the tax year ends on December 31. For a calendar year filer, the date for income tax filing is April 15 for individual income tax returns.
However, if the date falls on an off day such as Saturday, Sunday, or a legal holiday, the next business day becomes the due date.
Fiscal Year Filer
For fiscal year filers, the tax year ends on the last day of the month other than December. For fiscal year filers, the date for individual income tax returns is the 15th of the fourth month after the last day of the tax year. However, if the date falls on an off day such as Saturday, Sunday, or a legal holiday, the next business day becomes the due date.
When is Your Income Tax Return Considered Filed?
Income tax filing is not a short process; it takes time to reach the tax authority. It begins when you dispatch, post, or transmit the income tax return, and it ends when the IRS receives it.
Therefore, which of these dates should be considered your income tax filing date?
Knowing the filing date has its significance when you wish to file your taxes just before the deadline.
However, there can be two major ways you file your taxes; therefore, we will discuss both separately.
In case of postal filing
When you send the income tax returns through the mail, the tax return is considered filed when you correctly address, postmark, and deposit it in the mail. The date and time are recorded in your time zone.
In case of electronically filing
When you e-file income tax returns, the tax return is considered filed when you send or transmit the tax return. The date and time are recorded in your time zone.
The taxpayer later receives an acknowledgment of the IRS’s acceptance of your e-filed tax return.
Situations when you have additional time for income tax filing
The individuals serving in the armed forces in a contingency operation or a combat zone get additional time to file taxes if they get injured or become hospitalized due to serving in such operations.
These injuries or hospitalizations should be after the end of the tax year and before the deadline.
Moreover, individuals working or living outside the country (except Puerto Rico) in military or naval bases get two months of extensions in tax filing.
Lastly, if an individual cannot file by the deadline, they must request an extension by filing Form 4868.
However, you might need to pay interest on the additional time you take to pay tax returns and become at risk of late payment penalties.
Different Modes for Income Tax Filing
There are two ways you can file income tax returns – online or by sending physical paper through the mail. Electronically filing the income tax returns is a fast process that also allows you to receive your tax refunds in less time. On the contrary, mailing the income tax returns takes longer to reach, and your tax refunds take longer to be credited.
Ways to e-File Income Tax Returns
There are different ways to file income tax returns, such as by using accounting software or IRS Free File. Let us take a closer look at the procedure for the different ways to file income tax returns electronically.
1. Through IRS Free File or Fillable Forms
Individuals whose adjusted gross income (AGI) is equal to or less than $73,000 can file their taxes using IRS Free File. This is a free tax filing service offered by the Internal Revenue Service for eligible individuals.
Here’s what you need for income tax filing using IRS Free File:
- Social Security Number (SSN)
- Required tax forms
- Last year’s adjusted gross income
When you start using the IRS Free File, you can choose the software you want to use to guide you through the tax calculation and preparation. If you wish to calculate the taxes, you can use Free File Fillable Forms and upload them to the IRS.
2. Through a Free Tax Return Preparation Site
IRS has two types of tax return preparation programs: Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE).
The VITA and TCE sites are present at different locations in the USA and are meant to help elderly or disabled individuals, those who earn equal to or less than USD 60,000, or individuals who cannot speak English well.
You must check the IRS guidelines to know if you qualify to file taxes using a VITA or TCE site.
Those who qualify can go to the nearest VITA/TCE and consult IRS guidelines on what to bring before leaving.
3. Through a Commercial Software
You can also use tax preparation software to guide you through tax preparation and filing. For that, just collect all the tax information and begin preparing the taxes.
Once done, you need to electronically sign the e-filed income tax return. Once filed, the tax return will be transmitted to the IRS. You can file as soon as you prepare, but schedule the payment to a date until the deadline.
Some of the popular software for e-filing taxes are FreeTaxUSA, TurboTax, and H&R Block.
4. Through an Authorized e-file Provider
Authorized IRS e-file Providers are businesses that have been accepted to e-file income tax returns.
You can search for a suitable service provider in the ‘Authorized IRS e-file Provider Database.’ You can enter your postal or ZIP code or type in your state.
However, the IRS clearly mentions on its website that although it has included these service providers in the list, it doesn’t imply any endorsement by the IRS, and the individuals should decide on their due diligence and select accordingly.
Checklist – What You Need for Income Tax Filing
As you prepare to file your taxes using your preferred method, you must ensure you get a few things handy. Here are some general things you need for income tax filing:
- A duplicate of your previous year’s tax return to retrieve your Adjusted Gross Income (AGI)
- Provide accurate Social Security numbers for you, your partner, and any dependents, if any.
Income and Receipts
- All receipts about your small business, if applicable
- Income receipts from rental, real estate, royalties, partnerships, S corporations, trusts
- Social Security benefits
- Unemployment Compensation
- Form 1099-G, showing any refund, credit, or offset of state and local taxes
- Forms 1099-DIV and 1099-R showing dividends and distributions from retirement and other plans paid to you during the year
- W-2s, showing your annual wages from all of your employers
- Form 1099-INT, showing interest paid to you throughout the year
- Form 8962, Premium Tax Credit
- Form 1095-A, Health Insurance Marketplace Statement. For more information, see Affordable Care Act (ACA) Tax Provisions.
Outsource Your Taxes to Us
Preparing your tax return yourself has certain disadvantages – such as decreased quality, high tax costs, and inadequate tax research.
This prohibits you from saving the most on your taxes and makes you prone to risks like non-compliance and penalties.
For businesses, in-house tax preparation is expensive. The business also ends up paying large tax bills because of inadequate tax research.
Therefore, we invite individuals and businesses to outsource the tax planning and preparation to us. Moreover, we provide rich quality tax accounting and advisory that go a long way in helping you grow and flourish. Dial +1(800) 580-5375 and contact our accounting and tax advisor for a free trial.