Americans learn a lot of stuff in school that they frankly never use again from writing in cursive to long division to how to diagram a sentence.
In fact, a survey of 2,000 adults commissioned a few years back by H&R Block found that 84 percent of people learned things in school that they've never used after graduation. The average respondent also said that over half of the skills they use in the workforce were learned on the job, rather than in school.
That same survey found that some of the things adults wished they had been taught in school included money management (57 percent) and how to properly file taxes (44 percent).
"It's clear from the results that a lot of Americans aren't as confident as they'd like to be when it comes to many day-to-day life skills, including how to file their own taxes," says Heather Watts, senior vice president and general manager of digital at H&R Block, in a statement.
When it comes to the basics of filing your taxes, you need to make sure “Uncle Sam” is getting his cut of your paycheck or you could be in some trouble with the Internal Revenue Service (IRS), which oversees the collection of taxes for the federal government.
The first thing to determine is if you need to file a federal tax return. You can use the IRS online interview tool to find out if you need to file a tax return or you can use the IRS filing threshold chart:
For Tax Year 2022 Filing Thresholds by Filing Status:
Note that self-employed individuals are required to file an annual return and pay an estimated tax quarterly if they have net earnings from self-employment of $400 or more.
A person who is claimed as a dependent may still have to file a return. It depends on their gross income, including earned income (salaries, wages, tips, professional fees, and other amounts received as pay for work actually performed) and unearned income (investment-type income and includes interest, dividends, capital gains, rents, royalties, etc.).
Nerd Wallet says that regardless of income, people should generally file taxes if:
The reality of filing your federal taxes is that over the years there have been a lot of tears, broken No. 2 pencils (in the pre-Turbo Tax days!), and some hair loss trying to meet this unavoidable obligation.
“Nothing is certain except death and taxes,” quipped Ben Franklin in 1789 and he was a wise man.
The Tax Foundation reported that estimates from 2022 were that the average individual taxpayer spent 13 hours and $240 out-of-pocket in costs to prepare and file an annual return.
“Our complex tax code spans some 9,834 code sections, with detailed subsections, and a six-volume set of corresponding regulations, according to the National Taxpayer Advocate,” said the Tax Foundation.
The IRS says that taxpayers can follow these six steps to file their federal income tax return:
They need forms and receipts that show the money they earned and the tax-deductible expenses they paid. These include:
a. A W-2 form from each employer.Simple … right?
Well, the USA Today reports that it all depends on your situation.
“Is doing your own taxes a good idea?” asks the publication. “Like almost anything related to taxes, it’s complicated. It depends on how messy your finances are, how much you hate doing taxes, or if you’ve had a recent life change.”
USA Today says to do taxes yourself if:
USA Today says it makes sense to hire a tax pro “anytime your taxes are complicated.”
“Hiring a pro is a prudent choice after a major life change like getting married or divorced, having a baby, buying or selling a home or business, experiencing a major health issue, or retiring,” says USA Today. “Paying a tax professional is also wise if you now receive income from many different sources, have investment losses you need help dealing with, received an inheritance, or settled an estate.”
If you decide to do your own federal tax return, there are free programs and tools that can help you.
Check out some of the programs:
o VITA – You may qualify if at least one of these is true:
o TCE - This program focuses on questions about pensions and retirement-related issues. It offers free tax help to all taxpayers, particularly those who are 60 or older.
o Get help with tax preparation services.
o Use free filing software.
o Consult with professionals experienced with military tax issues.
Check out some of the free IRS tools that can help you with tax questions and preparing your return:
There are various ways to follow up with the IRS and find out if your tax return was received including checking online, calling the IRS, and other methods. Here are the ways to make sure your tax return gets to the right place:
o Social Security number and birthdate.
o Filing status: Are you single, married, or head of household?
o Any prior communications from the IRS.
Federal income taxes and the IRS get all the publicity but, in many states, counties, and cities you may have to pay taxes on income, property, and what you buy.
The different types of taxes you may have to file:
To learn how much you owe, how to pay, the due date, and how to get tax relief: