A checklist of documents you'll need to do your taxes.

How to File Your Taxes

In general, filing your taxes is about as enjoyable as updating your resumé, waiting in line at the DMV, or flossing your teeth. Most people don’t jump at the chance to do any of these things. But despite their boring and sometimes stressful nature, all these things still have to get done.

Well, we aren’t here with quick tips on careers, cars or dental health right now. What we’ve got are six steps to help you file your taxes. Go ahead and get them done and out of the way for another year. Ready? Let’s get started!

1. Gather your forms. 

First, you need to get your stuff together. You should have any necessary income forms—like a W-2 or 1099—in front of you when you get ready to file. You’ll also want to have any paper work that’s going to help you get deductions. Here are a few things you should have on hand, depending on what applies to you:

  • W-2 forms (a summary of your income)
  • 1099 forms (if you received money from someone other than your employer)
  • 5498 forms (a summary of your IRA contributions)
  • Schedule B form (if you received interest income and/or ordinary dividends)
  • Mortgage interest statements
  • Investment income statement
  • Charitable donation receipts
  • Proof of deductible expenses

You should get all these forms in the mail or electronically by January 31 at the latest. If you don’t get something by the first or second week of February, it’s time to call the necessary people (like the HR department at work) and get that paper work in time to file.

If you’ve had a major life change, you’ll need to add one (or more) of these to the list:

  • Form 8822 (if you moved)
  • SS-5 form (if you changed your name)
  • W-4 form (if you need to adjust tax withholdings based on a new household income)

You can’t start filing until you’ve gathered all these forms—so get gathering!

Pick standard or itemized deductions.

Americans love choices. Dine in or carry out. Paper or plastic. Standard or itemized deductions.

Okay, maybe you don’t know what that last one means. What the heck are deductions anyway? Simply put, tax deductions make your taxable income smaller—which means you pay less in taxes. Sweet. And you can get deductions for things like:

  • Childcare
  • Education costs
  • Charitable giving and donations
  • Medical expenses
  • Energy-efficient cars

Picking between the standard deduction or itemized deductions can be tricky. But don’t lose focus here: It can make a big difference in the size of your tax bill, so you want to get it right! The standard deduction will lower your income by a fixed amount. If you itemize instead, you’ll list out every expense that qualifies and do the math to see the total amount you can claim as a deduction.

Think about it like this: The standard deduction for the 2019 tax year is $12,200 for single filers and $24,400 for married folks filing jointly (aka filing together).1 So to figure out which deduction would be better, add up all the things that could count as itemized deductions. If that amount is more than the standard deduction, you’re better off itemizing. If that amount is less than the standard deduction, take the standard.

But what qualifies as a deduction? Good question. If you think you’re going to go with itemized deductions, you need a tax pro to make sure you get it all right.

3. Select a filing status.

Alright, picking your filing status should be easy. Married or single. Done, right? Not quite. There’s actually a little more to it. There are five different statuses to choose from. Let’s break them down:

  • Single: Select this option if you’re unmarried, divorced or legally separated, or widowed before the tax year.
  • Married Filing Jointly: If you’re married and both of you agree to file a return together, select this status. Usually married couples save more by filing jointly.
  • Married Filing Separately: You and your spouse don’t have to file together. In some cases, it makes more sense to file your tax return separately from your spouse. This might be a good option if:
    • Your spouse isn’t paying their taxes.
    • You don’t know if your spouse is honestly reporting income or deductions.
    • You make less income than your spouse and want to claim personal medical debt as a deduction (or vice versa).
  • Head of Household: If you’re a single parent or taking care of a sick family member, you might qualify for this. It’s a bit tricky, though. You have to have paid for more than half the household expenses that year, be unmarried, and have a qualifying child or dependent.
  • Qualifying Widow(er): If your spouse dies and you don’t remarry within the same tax year, you can file jointly with your deceased spouse. And you can do this for up to two years after their death. Okay, this sounds morbid to think about, but it might be the best way for you to file.

The first two filing statuses we listed are the most popular. (We don’t mean they’re high school cheerleader popular—we just mean most people file that way.) If you’re not sure which method works best for you, get advice from a tax pro

4. Decide how to file your taxes. 

We know taxes are stressful, but they don’t have to be. For starters, you don’t have to do this alone. There are trained tax pros who love doing this stuff (for some reason). Good for them—and for you! But maybe you don’t even need a tax pro. Maybe your filing is pretty simple and you just need a dependable tax software.

It’s hard to know if you need to hire professional tax help. But you can end that worry by taking Dave Ramsey’s quick-and-easy online quiz. After just a few questions, you’ll know if you’re safe doing your own taxes or if you need a tax pro. Plus, you’ll get straightforward advice on the best way to take the next step, which is to actually file your taxes!

5. File your taxes.

The deadline to file your taxes for 2020 is April 15. But that doesn’t mean you have to wait until April to get started. Because filing early has several benefits. First, you just get it over with. While everyone else is rushing around in panic mode mid-April, you’ll be sipping lemonade in spring break mode. Nice.

Second, if you end up needing to pay taxes to the IRS, you still have time to save the money you owe. Just set up a sinking fund in your EveryDollar budget and start saving up for the next three months to get it paid without going into debt! And if you do need to pay, you can do that one of three ways:

They say the early bird gets the worm. When it comes to taxes, that means peace of mind. So nab that worm, budgeters.

6. Prep now for next year.

Yay! You’re done filing your taxes! Now what? It’s time to find some answers to these three common questions so you can get ahead on next year’s taxes. 

What do you do with your tax return paper work?

Don’t celebrate being done with this tax season by tossing all those papers in the trash.  Save a copy of your tax return and any of the receipts you used for at least three years.

What about your tax refund?

If you’re getting a refund, you can expect your payment after 21 days if you file online, or after six weeks if you mail in your return.2 You’ll have the option to request a check or direct deposit when you file, and that’s just how it’ll come in!

How do you get ready for next year’s taxes?

If you end up with a big tax bill or tax refund, it’s time to go ahead and make some adjustments for next year’s taxes. Your goal is to owe nothing and get nothing back.

Yes, friend, you read that right. We said you don’t want a hefty tax refund. But why? They’re so fun! Yeah, we guess—if letting the government control your money all year sounds fun.

Seriously, a tax refund just means the government’s been doing whatever they want with your hard-earned cash. And all that time you could’ve put that money in your budget instead of theirs. You could’ve been using it to crush your money goals. All. Year. Long. Suddenly the refund doesn’t sound so fun after all.

And if you really want to crush those money goals—you really need a budget. Try EveryDollar, the practical, mobile, free budgeting app that can help you take control of your money one monthly budget at a time. Now that sounds like real fun.