Filing tax returns can be a tiring task. However, not everyone must necessarily do the process. Whether you need to or not depends on a few factors, including your type of income, age, filing status, and more. While you may qualify not to, it could be beneficial to file tax returns, especially if you want to claim an Internal Revenue Service (IRS) refund. Consider talking to an expert if you’re unsure what to do. Similarly, you may want to prepare your taxes with your Denver tax advisor to avoid mistakes.
Why should You File Tax Returns?
Whether you should or not file tax returns depends on several factors. While it may not be necessary, you may want to consider this decision as filing tax returns could benefit you.
Everyone on a regular paycheck almost certainly pays tax. While acquiring a new job, your employer most probably asked you to fill a Form W-4. The information you fed into the form determines the amount of taxes your employer deducts from your payroll to pay to relevant federal and state governments in terms of taxes.
However, the information you used while setting up payroll withholding may not be reliable and could lead to over-or underpayment of taxes. That could mean that you qualify for a refund from IRS, or you need to pay more than your employer is currently withholding from your payroll.
Similarly, the IRS recommends keeping your Form W-4 current and filling in the requirements in the event of any life-changing situations that could legally affect your tax obligations. For example, if you get married, get a child, or receive an unexpected income source. Depending on the situation at hand, filing a tax return may help you get a tax break or mean you need to pay more to the IRS.
Lastly, you should consider filing returns if you had an additional income within the year that the law requires you to report, and that qualifies for taxing. Conversely, filing returns can also help you take credits and deductions as provided in the tax code. With such, you can acquire a refund for the taxes you’ve paid or reduce the amount you owe to IRS, depending on the situation.
How To File Tax Returns
There are three primary options for filing tax returns. They include:
1. Manual Filing
To personally file your returns, you’ll need to fill the Form 1040, following the instructions from the IRS. Once you’re done, send the form to IRS via mail, with your tax payment for the year.
2. Using an App or Website
You may also want to consider tax software programs or websites like H&R Block. These programs guide you through the process, with a series of inquiries about your earnings and possible deductions. The software then helps you fill your Form 1040 and electronically file it on your behalf, depending on how you answer the questions.
3. Using the Help of a Professional
If unsure how to do it, or want to do it right at once, consider the help of a professional. Professionals such as an accountant or tax advisor, will help you increase your deductions and fill out your returns.
Tax filing could help you get relief from the government, reduce the amount you pay, or acquire a refund. Similarly, it will also help you know if you’re paying less and help you make informed tax decisions.