Learning how to file correctly is important. Not filing properly can cost you thousands of dollars.

Filing your taxes correctly and on time can prevent you from spending hundreds, if not thousands, of dollars in interest and penalties for underreporting your income, or not reporting it or all. If you are unable to pay taxes owed – or just don’t pay your tax bill, your bank accounts can be seized and drained without notice.

When are you required to file federal and state taxes?

The Internal Revenue Service (IRS) requires taxpayers to file a tax return every year by April 15. State returns are traditionally filed at the same time, but check your respective state government for state filing deadlines.

How much income requires you to file a tax return?

You can check the IRS website to get information on how much income requires you to file a tax return, but here are the guidelines it uses.

If you made less than the amounts in the guidelines and federal taxes were deducted from what you received, you may want to file a return to see if you are eligible for a refund.

Filing Your Taxes

Step 1. Gather Your Documents: Collect all the necessary documents, including your W-2 form (if you’re employed), 1099 forms (if you’re self-employed or received other income), records of any deductions or credits you plan to claim, and any other relevant financial information.

Step 2. Determine Your Filing Status

The IRS defines the five filing statuses as: single, married filing jointly, married filing separately, head of household, and qualifying widow(er) with dependent child.

Step 3. Choose a Filing Method

You have three options for filing your taxes:

• Tax software that can be downloaded on to your computer.
• Online with websites such as Turbo Tax*, FreeTaxUSa, TaxSlayer, or TaxAct, among others. These apps guide you step-by-step to complete your federal and state taxes and may electronically submit your forms to the IRS and the state.
• Paper using the official forms from the IRS. You would complete your tax returns offline and mail them to the appropriate IRS mailing address.

Your tax return can be filed free of charge using the IRS website. You can find IRS publications here that explain the filing process. The IRS also has taxpayer clinics for low-income residents.

*TurboTax, an Intuit-owned company, has been one of the most popular options for tax filing, however, it has been sanctioned by the Federal Trade Commission for its business practices, so use it and other similar online programs with caution. Pay for only the services you need.

Step 4. Check your work

Double check the information on your tax forms BEFORE filing. Ensure that the personal information, like your address, phone number, and Social Security number are correct. Ensure the amount of income you’re reporting, deductions, and other detailed information is correct. If you are unsure or have questions, consult a tax professional.

This is a primer on how to file your taxes for the first time. Please be aware that you should ALWAYS contact a tax professional if you have questions about the process or any specific tax situation. All the information provided here is from the Internal Revenue Service which oversees federal tax collection.

🚨 Remember to download and keep paper copies of tax returns you file with the IRS or state tax agency. The general rule is to keep those tax returns for a minimum of three years in case you’re audited later, and your W-2 and 1099 forms, plus any related documents for at least 10. years. An audit is a detailed review of the information you have provided. Urban Money Budgets suggests you keep all your tax documents indefinitely. There is no statute of limitations on when state tax agencies can launch an a