Frequently Asked Questions
To find out if you must file a tax return, consider your income, age, filing status, and dependency status. Even if you don’t owe taxes, you may still need to file. Check IRS Publication 501 for specific criteria. Self-employment income over $400 and certain situations, like receiving untaxed tips, also require filing.
The IRS defines income as money, property, or services, unless exempted by law. Report all taxable income on your return. Earned income (like wages) and unearned income (e.g., child support, Social Security) are taxed differently. IRS Publication 525 provides a detailed list of taxable and nontaxable income.
Your filing status impacts your tax rate, deductions, and eligibility for credits. Select from five options: single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with a dependent child. Use the IRS’s interactive tool for guidance.
Dependents can lead to tax benefits, such as the child tax credit and head-of-household status. You may have a dependent if you meet specific criteria: a qualifying child (under 19 or under 24 if a full-time student) who lives with you, or a qualifying relative with shared relationships or full-year residency. The IRS’s Interactive Tax Assistant Tool helps determine dependency.
The U.S. tax system is progressive, meaning different portions of your income are taxed at different rates. There are seven tax brackets. To know your bracket and rate, determine your income and consult the IRS Tax Rate Schedules for the relevant year.
Starting from 2018, a single Form 1040 replaced three previous forms. The 2020 Form 1040 is simpler and serves as the foundation for all individual tax filings. More complex situations may require additional schedules.
Deductions lower your taxable income. You can opt for the standard deduction or itemize your specific deductions. Itemizing involves listing deductible expenses like mortgage interest. Compare the standard deduction amounts for your filing status to see which option is more advantageous:
- Single or married filing separately: $12,400
- Head of household: $18,650
- Married filing jointly: $24,800
Due to increased standard deductions from tax reform, itemizing may not be beneficial for everyone.
Both tax credits and deductions reduce your tax liability. Deductions lower your taxable income, while credits directly reduce the tax you owe. For example, a $1,000 deduction reduces your taxable income, potentially saving you money based on your tax rate. In contrast, a $1,000 credit directly subtracts $1,000 from your tax bill.
Deductions and credits depend on your situation. Some deductions (no need to itemize):
- Contributions to retirement accounts like IRAs
- 50% of self-employment taxes
- Student loan interest (up to $2,500)
- Tuition and fees (up to $4,000, income limits apply)
- Personal contributions to health savings accounts
Deductions that require itemizing:
- State and local taxes (up to $10,000)
- Home mortgage interest ($1 million before Dec. 15, 2017, $750,000 after)
- Medical expenses (if they’re 7.5%+ of your income)
- Charitable contributions (up to a set percentage of income)
Credits:
- Earned income tax credit
- Child tax credit (up to $2,000 per child)
- Child and dependent care tax credit (up to $6,000)
- American opportunity tax credit (up to $2,500)
- Lifetime learning credit (up to $2,000)
Other deductions and credits may apply to your situation.
File your federal income tax return by Tax Day, usually around April 15 (or the next business day if it falls on a weekend or holiday).
Choose your filing method:
- Mail (check IRS for your state’s address)
- IRS e-file (free for income ≤ $72,000)
- Free online tax filing
- DIY with fee-based software
- Paid tax professional (for complex situations)
E-filing is faster for refunds.
Most e-filed refunds arrive within 21 days; paper returns take up to six weeks. Certain credits or deductions may delay refunds. Track your refund on the IRS “Where’s My Refund” site.
File your taxes even if you can’t pay. Not filing leads to penalties and interest. If you can’t pay in full:
- IRS offers payment options, like installment agreements.
- Note: Interest and penalties still apply, even with a payment plan. Costs vary based on the plan’s duration and method of application.