Filing Your Taxes#
Filing taxes can be a daunting task. If you don't do it correctly, you could end up in a confusing and frustrating situation. For very basic tax returns, hopefully this guide will make things easier. You should still do your own research, r/personalfinance has a good tax wiki to get you started. If you think you have a more complex tax situation, you should definitely consult a tax professional. I am not a professional, and this guide is not a substitute for professional advice.
Gather Your Documents#
When should I start gathering my tax documents?
You should not even think about your taxes until mid-January, as that is when tax documents start to trickle in.
Common Documents#
Before you can file your taxes, you need to gather all of the necessary documents. What documents you need will depend on your personal situation, but here are some common ones:
- W-2: This comes from your employer and reports your taxes on your salary. You are pretty much guaranteed to get one of these. You will get one of these from each employer you had during the year.
- 1095-C: This is a form that reports your health insurance coverage. You will get this if your employer provides health insurance. This is not required to file your taxes, but you should keep it for your records.
- 1099-??: This reports income that is not from your employer. You will get this if you have any investments or you are a freelancer. There are many different types of 1099s, so don't be surprised if you get more than one, or even more than one from the same organization.
- 5498: This reports contributions to your retirement accounts. You will get this if you have a retirement account. This is not required to file your taxes, but you should keep it for your records.
This is not an exhaustive list, just what you might expect as a single person who rents. If you want to see a full list of documents you might receive, I find FreeTaxUSA's list of forms to be a good starting point.
Checklist#
Each organization that should be sending you a tax document will, either by mail or electronically. It is a good idea to keep track of what you should be getting, so you can follow up if necessary.
| Organization | Form Types | Notes |
|---|---|---|
| Employer | W-2, 1095-C | One for each employer |
| Bank | 1099 |
Checking or savings account (sometimes even credit cards) Examples: Chase, Capital One, Wells Fargo, Bank of America |
| Brokerage | 1099, 5498 |
Wherever you own stocks, index funds, bonds, etc. Examples: Fidelity, Vangaurd, Schwab, Robinhood, Coinbase |
What if I got a tax document that is not on this list?
If you have received tax documents unlike any of the above, this guide is probably not enough. You should stop reading it, do your own research, and/or consult a tax professional.
Filing Online#
When should I start filing my taxes?
You should not file your taxes until mid-February, as that is when all tax documents should have been sent out. But if you are unsure if you have all of your documents, you should wait until March.
The easiest way to file your taxes is to use FreeTaxUSA. It is free to file your federal taxes, and only $15 to file your state taxes.
If you can avoid TurboTax, you should. They are a toxic company that has been known to hide their free filing option1 and lobby against free tax filing2. ProPublica has a fantastic series of articles on this topic (The TurboTax Trap), if you want to learn more.
There is another good alternative coming online in the next few years: IRS Direct File. Depending on your state, it might already be available. You still have to separately file your state taxes. Depending on your state, there might be a free direct file option that integrates with Direct File3, like My Tax Illinois.
