Overwhelmed by Your Taxes? This 5-Step Process Makes Filing Easy

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Your taxes will be filed in no time if you do these five things. 

We’re now less than four weeks from the 2022 tax-filing deadline, but if you haven’t filed yet, don’t worry, you still have plenty of time left to get them done. But you shouldn’t wait too much longer to get started.

If you’ve been dragging your feet because filing taxes feels overwhelming, it can help to break it down into smaller tasks. Here’s a simple five-step process you can follow. You can even split it up over several days if that feels easier to you.

1. Figure out your tax-filing status

Knowing your tax-filing status is crucial to the rest of this process, so it’s a good idea to figure this out right away. There are five filing statues you can choose from:

Single: This is for unmarried adults with no dependents.Married, filing jointly: This is the status most married couples use.Married, filing separately: In rare cases, married couples may choose to file separate returns instead of a joint return.Head of household: This is for unmarried adults who have dependents.Qualifying widow(er): Those who were widowed and haven’t remarried may use qualifying widow(er) status in the two years following their spouse’s death.

You may only qualify for one status, in which case, your decision is easy. But if you qualify for more than one, you need to explore your options to decide what is best for you.

In general, it’s best for married couples to file jointly because it gives them access to more tax breaks and a higher standard tax deduction — the amount of your earned income the government considers non-taxable by default.

But filing separate returns could make sense in rare situations. For example, if one spouse had large medical bills, filing separately could help the couple save because you can write off large medical expenses that exceed 7.5% of your adjusted gross income (AGI). This is easier to do when you’re not counting your spouse’s income.

Also, those who are eligible for qualifying widow(er) status are often better off claiming this than opting for single or head of household status. Qualifying widow(er)s have the same tax brackets and standard deductions as married couples filing jointly, so they can earn more before jumping up to the next tax bracket.

When in doubt, a tax-filing software or a tax professional can help you choose the filing status that will save you the most money overall. All you need to do is provide your information.

2. Figure out if you need to file taxes at all

Some people don’t need to file a federal tax return for 2022. It depends on their annual income, their age, and their filing status. Here’s a table showing the minimum income at which you need to file a return, based on your age and filing status.

But just because you aren’t required to file taxes doesn’t mean you shouldn’t. Some refundable tax credits, like the Earned Income Tax Credit, can reduce your tax liability below $0, resulting in a refund for you. If you think you qualify for these, filing a return could lead to a nice check you can put toward whatever you want.

You may still have to file state taxes, but this depends on where you live. Some states don’t charge income taxes, but many do. Consult with a tax professional familiar with the laws in your state if you’re unsure whether you need to file state taxes for 2022.

3. Gather all your relevant tax documents

Filing taxes will go much more smoothly if you have all your documents at the ready. So gather yours together and find a folder to keep them in until you’re ready to file your return.

As a general rule, you’ll need documents for every source of taxable income you have and any tax break you plan to claim. This includes:

W-2s1099sDetails of retirement account, health savings account (HSA), and 529 plan contributionsReceipts for large medical bills or higher education expensesRecords of self-employment income and estimated taxes paid, if you own your own business

You’ll also need the birthdates and Social Security numbers for all individuals, including dependents, you’ll list on your return.

Now’s a good time to review this information for accuracy and completeness. If you realize you’re missing an important document, try to track it down. And if you notice an error, like a Social Security number that’s written incorrectly on a W-2, notify your employer immediately so you can get this corrected before you file your return.

4. Decide how you’ll file your taxes

After completing the three above steps, you should have what you need to file your return. But not everyone has the time to file their own taxes or feels confident doing so. Handing your taxes off to a qualified tax professional is an option, though it might be tough to find one accepting new clients right now. You may have to call a few places to find someone who can fit you in before the tax deadline.

The IRS maintains a Directory of Federal Tax Return Preparers who are qualified to assist you with your 2022 taxes. You can search by location and credentials to find ones in your area.

If you decide to file your taxes on your own, you’ll need to select a tax-filing software. Depending on your income, you may be able to file for free. But most require you to pay a fee to file your federal and state return. The exact cost will depend on the package you choose.

Some software now offers access to live tax professionals who can help you with questions that arise as you’re filling out your return. This could be a viable alternative to handing your taxes off to an accountant if you don’t feel confident doing your taxes on your own.

5. File your return

The final step is to actually get your return filed. This could mean submitting all your paperwork to the tax professional who will be doing it for you or sitting down with your tax software and crunching the numbers.

If you’re doing it yourself, it’s OK to take breaks. Your tax software should enable you to save your place and pick up where you left off at a later date.

Most tax software tries to break the process down into simple questions, but it can still be confusing sometimes. When in doubt, research the information on your own or consult with a tax professional to ensure you’re responding correctly.

When you’re all done, your tax preparer or software should tell you what kind of refund you’ll get or how much you owe the government. If you’re getting a refund, you can provide the bank account where you want the refund deposited. Those who owe can pay their debt in full if they’re able to do so. Or they can set up a payment plan with the IRS.

Once that’s squared away, you’re all done. Pat yourself on the back and enjoy another year before you have to think about taxes again. Be sure to hold onto all your 2022 tax documents, though. In the unlikely event that you’re audited, you’ll need to provide copies of your return and all associated paperwork to prove what you earned and which deductions you qualified for.

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