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Tax Return Filing Basics

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  • FILING BASICS
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  • TAX TIPS

Tax Return Filing Basics

There are a few things you should know about preparing and filing your return before beginning the filing process. Understanding the information on this page will make your attempts to get a tax refund easier and less stressful.

Social Security Numbers

It is important that you have the correct Social Security number and date of birth for each person you will claim as an exemption on your return. If each name, Social Security number, and date of birth do not match exactly when you file the return, the IRS will reject your return and ask you to submit the correct information.

Recommended Records

Preparing your tax return will be easier if the records you need are organized and readily available:

  • Proof of identification
  • Social Security numbers for you, your spouse, and dependents
  • Birth dates for you, your spouse, and dependents
  • Wages and earnings statements: Forms W-2, W-2G, 1099-R, etc.
  • Interest and dividends statements from banks, brokerages, etc.
  • A copy of last year’s tax return
  • Bank routing and account numbers
  • The amount you paid for childcare and the childcare provider’s tax identification number
  • Receipts for charitable donations

Preparing Your Return

You can choose to prepare your return yourself or get assistance from a qualified tax professional. If you choose to prepare your return yourself, consider using a tax software program to assist you. Tax software can make the preparation easier, help you understand all the credits and deductions you are qualified to receive, and allow you to e-file your return. TaxNFS.com lets you prepare and e-file both your federal and state taxes.

Hiring a Professional

If you choose to hire a tax professional to prepare your tax return, choose carefully. It is important to choose a qualified professional, because you are ultimately responsible for the accuracy of your return. Before signing your return, review it to ensure that all information is correct, that you understand the entries, and are comfortable with the accuracy of your return. Never sign an unfinished return, and always ask your tax professional to sign the return in your presence.

Free Tax Preparation Assistance

If you cannot afford a professional tax preparer or you need help preparing your own return, you can visit an IRS Volunteer Income Tax Assistance (VITA) site. Each VITA site has volunteers who are trained to help you figure special credits, prepare basic tax returns, and e-file your return. VITA sites are for taxpayers making $51,000 or less. To locate a VITA site near you, call (800) 906-9887.

 

Who Must File a Return

Whether you must file a return depends on your gross income, filing status, and age. It doesn’t matter whether you’re filing taxes online or by mail.

Gross Income

Gross income includes all income that you receive in the form of money, goods, property, and services. It does not include any income that is tax-exempt.

Filing Status

Your filing status is determined on the last day of the tax year, which is December 31 for calendar year taxpayers. Your filing status will be determined by whether you are single or married, and what your family situation is.

Age

If you are age 65 or older on the last day of the tax year, you are allowed a higher amount of gross income than other taxpayers before you are required to file a return. The table below lists the income limit amounts for the 2012 tax year.

 

If your filing status is … and at the end of the year you were …* you must file if your gross income is at least …**
Single under 65
65 or older		 $9,750
$11,200
Married Filing Jointly*** under 65 (both spouses)
65 or older (one spouse)
65 or older (both spouses)		 $19,500
$20,650
$21,800
Married Filing Separately any age $3,800
Head of Household under 65
65 or older		 $12,500
$13,950
Qualifying Widow(er) with Dependent Child under 65
65 or older		 $15,700
$16,850

 

* If you turn 65 on January 1, 2013, you are considered to be age 65 at the end of 2012.

** Gross income means all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States (even if you may exclude part or all of it). Do not include Social Security benefits unless you are married filing a separate return and you lived with your spouse at any time during 2012.

*** If you did not live with your spouse at the end of 2012 (or on the date your spouse died) and your gross income was at least $3,800, you must file a return regardless of your age.

 

Who Should File

Even if you are not required to file a tax return, you should if you are eligible to receive a tax refund. You should file if any of the following are true:

 

Which Tax Form to File

Whether you’re doing taxes online or not, there are three types of 1040 forms for filing your tax return. Which form you should use depends on your tax situation. It’s important to file the correct form to ensure that your return is processed quickly. Preparing your return with the help of tax preparation software is an easy way to make sure you are filing the right type of forms. Tax preparation programs, such as TaxNFS.com Online Tax Preparation, choose the appropriate forms for you.

Form 1040EZ

Form 1040EZ is the simplest form to use, but it allows only the simplest types of tax returns. You can file Form 1040EZ if all the following are true:

  • Your filing status is single or married filing jointly.
  • You do not claim any dependents.
  • You do not claim any adjustments to gross income.
  • You do not claim any credits other than the Earned Income Credit.
  • You, and your spouse if filing jointly, were under age 65 and are not blind as of January 1, 2013.
  • Your taxable income is less than $100,000.
  • You do not owe any household employment taxes on wages paid to household employees.
  • You are not a debtor in a Chapter 11 bankruptcy case filed after Oct. 16, 2005.
  • Your income is only from:
    • Wages
    • Salaries
    • Tips (must be reported in boxes 5 and 7 of Form W-2)
    • Unemployment compensation
    • Taxable scholarships and fellowship grants
    • No more than $1,500 in interest income
    • Alaska Permanent Fund dividends

Form 1040A

You can file Form 1040A if all the following are true:

Form 1040

If you do not qualify to file Form 1040EZ or Form 1040A, you will file Form 1040. All types of income, credits, deductions, and taxes can be reported on this form. You must use Form 1040 for any of the following:

  • You have self-employment income (including farm income).
  • You received $20 or more in unreported tips in any one month.
  • You received income as a partner in a partnership, as a shareholder of an S corporation, or as a beneficiary of an estate or trust.
  • You received dividends on insurance policies if they exceed the total of all net premiums you paid for the contract.
  • Your taxable income is $100,000 or more.
  • You itemize deductions.
  • Your Form W-2, box 12, shows uncollected tax on tips or group term life insurance.
  • Your Form W-2, box 12, shows a code Z.
  • You owe excise tax on insider stock compensation from an expatriated corporation.
  • You are a debtor in a Chapter 11 bankruptcy case filed after October 16, 2005.
  • You have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option.
  • You owe household employment taxes.
  • You are claiming the adoption credit or received adoption benefits from an employer.
  • You are eligible for the Health Coverage Tax Credit.
  • You are an employee and your employer did not withhold Social Security and Medicare tax.
  • You had a qualified health savings account funding distribution from your IRA.
  • You have a net disaster loss attributable to a federally declared disaster.

 

Tax Filing Status

Determining your filing status is the first step in determining your filing requirements, standard deduction and correct tax. Your filing status will usually be determined by whether you are married or unmarried. The IRS defines marriage as a legal union between a man and a woman as husband and wife.

Your marital status on the last day of the tax year determines your status for the entire year. If you were separated or divorced under a divorce or separate maintenance decree on the last day of the year, you are considered unmarried for the entire year. State law governs whether you are considered married, legally separated or divorced under decree.

You are considered married if any of the following are true:

  • You are married and living together as husband and wife.
  • You are living together in a common-law marriage, where recognized in the state you live in or in the state where the common law marriage began.
  • You are married and living apart but not legally separated by a divorce or separate maintenance decree.
  • You are separated under a temporary decree of divorce.

If your spouse died during the year, you are considered married for the entire year. If you remarried before the end of the year, you can file jointly with your new spouse and file a married filing separately return for your deceased spouse.

There are five filing statuses:

Single

You can only file as single if you are unmarried or considered unmarried for the entire year. If claim dependents as an exemption, you may be able to file as head of household, which usually results in a lower tax than filing as single.

Married Filing Jointly

If you are married or are considered married, and you and your spouse agree, you can file married filing jointly. Filing jointly usually results in a lower tax than filing separately.

If you and your spouse elect to file jointly, you both can be held responsible, separately or together, for the tax and any interest or penalty due on your return.

Married Filing Separately

If you are married or are considered married and you and your spouse do not agree to file jointly, you can file married filing separately. If you file a separate return you generally only report your own income, credits, exemptions and deductions. Filing separate returns usually results in a higher combined tax.

Head of Household

Filing as head of household usually results in a lower tax than filing singly or married filing separately. You can file as head of household if you are single or unmarried, paid more than half the cost of keeping up a home, and had a qualifying child or qualifying relative that lived with you in the home for more than half the year. But if the qualifying relative is your parent, he or she does not have to live with you. You must be able to claim an exemption for the parent, and you must pay more than half of the cost of the parent’s household expenses.

If you are married you can file as head of household if you can be considered unmarried. All of the following must be true:

  • You and your spouse file separately.
    • You pay more than 50% of the expenses of maintaining the household.
    • Your spouse did not live in the home for the last 6 months of the year.
    • The household is the principal home of a qualifying person or child.
    • You can claim an exemption for a qualifying person or child.

    You can also file as head of household if your spouse was a nonresident alien at any time during the year. However, your spouse does not count as a qualifying person. You must have another person and meet all the other tests to qualify for head of household.

    Qualifying Widow(er)

    If your spouse died during the year, you generally can file married filing jointly. For two years after the death of your spouse you can file as qualifying widow(er) if all of the following are true:

    • You did not remarry.
    • You qualified to file married filing jointly with your spouse in the year your spouse died.
    • You pay more than 50% of the expenses of maintaining the household.
    • The household is the principal home of a qualifying child.
    • You can claim an exemption for a qualifying child.

     

     

    Personal Tax Exemption

    Exemptions directly reduce your taxable income. You are allowed a personal exemption for yourself, your spouse if married filing jointly, and each person you can claim as a dependent. For 2012, the exemption amount is $3,800, regardless of your income.

    You can take a personal exemption for yourself unless another taxpayer can claim you as a dependent. Even if the other taxpayer does not take an exemption for you, you cannot claim the personal exemption.

    Spouse Exemption

    If you file a joint return, you can claim an exemption for your spouse.

    If you are filing separate returns, or as head of household, you can claim an exemption for your spouse only if you meet all of the following:

    • Your spouse has no gross income.
    • Your spouse is not filing a return.
    • Your spouse was not another taxpayer’s dependent.

    If your spouse could be claimed as someone else’s dependent, you cannot claim the exemption, even if the other taxpayer does not claim the exemption for your spouse.

    If your spouse died during the year and you did not remarry, you can claim an exemption for your spouse if you are filing a joint return in the year of your spouse’s death.

    Dependent Exemptions

    You can claim one exemption for each person you can claim as a dependent. Even if your dependent files a return, you can still claim a personal exemption for him or her.

    You can take one exemption for each qualifying child or relative if the person meets three tests:

    • Dependent Taxpayer Test
      • If you could be claimed as a dependent by another taxpayer, you cannot claim anyone else as your dependent. This is true even if you have a qualifying child or relative.
    • Joint Return Test
      • You generally cannot claim a married person as a dependent if he or she files a joint return.
      • This test does not apply if a joint return is filed by a dependent only to claim a refund and no tax liability exists for either spouse, even if they filed separate returns.
    • Citizen or Resident Test
      • You cannot claim an exemption for a dependent unless the person is a U.S. citizen, resident alien, national, or a resident of Canada or Mexico for at least part of the year.
      • If you are a U.S. citizen or national who has legally adopted a child who is not a U.S. citizen, resident alien, or national, this test is met if the dependent lived as a member of your household the entire tax year.

    Non-Resident Aliens

    If you are a non-resident alien, generally you can only claim an exemption for yourself. You cannot claim an exemption for your spouse or any dependents.

    This does not apply to residents of Canada, Mexico, or certain residents of India and Korea. This also does not apply if you are a non-resident alien married to a U.S. citizen or resident alien, and have chosen to be treated as a resident of the United States.

     

    Taxpayer ID Numbers

    Each taxpayer who files a tax return must have an identifying number. In addition, each dependent claimed on a tax return must have an identifying number. The identifying number can be a Social Security Number, Adoption Taxpayer Identification Number or Individual Taxpayer Identification Number.

    Social Security Number

    A Social Security Number is an identifying number issued by the Social Security Administration. The only Social Security Numbers valid for tax filing are ones issued to U.S. citizens, noncitizens lawfully admitted for permanent residence, or noncitizens permitted to work permanently in the United States.

    To apply for a Social Security Number you will need to file Form SS-5.

    Adoption Taxpayer Identification Number

    The IRS issues an Adoption Taxpayer Identification Number (ATIN) as a temporary identification number for the child of a domestic adoption. This number is assigned when the adopting taxpayers are unable to obtain a Social Security Number (SSN) for the child. Refer to Adoption ID Number for more information.

    Individual Taxpayer Identification Number

    An Individual Taxpayer Identification Number (ITIN) is an identifying number issued by the IRS. The number is only valid for filing your tax return. The IRS issues ITINs to filers or dependents who do not have a Social Security Number and are not eligible to receive one. ITINs are issued regardless of immigration status.

    An ITIN is only used for tax reporting. An ITIN does not:

    • Authorize a person to work in the United States
    • Provide eligibility for Social Security benefits
    • Provide eligibility for the Earned Income Credit

    When applying for an ITIN you will need to provide proof of identity. The documents will need to prove your identity and foreign status. If you have an unexpired passport you will not need any other form of identity. If you do not have a valid passport you will need to provide a notarized or certified copy of at least two of the following:

    • National identification card
    • U.S. or foreign driver’s license
    • Civil birth certificate
    • U.S. state identification card
    • Foreign voter’s registration card
    • U.S. or foreign military identification card
    • Visa
    • U.S. Citizenship and Immigration Services photo identification
    • Medical records (dependents under 14 years old only)
    • School records (dependents or students under 25 years old only)

    To apply for an ITIN, use one of these options:

     

     

    Tax Due Dates

    For 2012 returns, the due date for timely filing your return is April 15, 2012.

    For most taxpayers, April 15 is usually the due date for filing a tax return. If you use a fiscal year, your return is due the 15th day of the fourth month after the close of your fiscal year. Example: if your fiscal year ends June 30, your tax return due date would be October 15.

    If the due date falls on a Saturday, Sunday or legal holiday, the due date is extended to the next business day.

    If you cannot file your return by the due date, you can request an automatic six-month extension of time to file. To request an extension, file Form 4868 no later than the due date of the tax return.

    Requesting an extension of time to file does not entitle you to an extension of time to pay tax. If you do not pay tax by the due date of your return, you will owe interest on past-due tax, as well as late payment penalties.

    If you are a U.S. citizen or resident and your main place of business is located outside of the United States or Puerto Rico, you are allowed an automatic extension until June 15 to file and pay tax that is due. This also applies to members of the military stationed outside the United States or Puerto Rico. If you choose to use this automatic extension, you must attach a statement to your return showing that you met the requirements for the extension.

    You should file tax returns when they are due, regardless of whether you can make full payment with the return. Failure to file can be costly, and a delay in filing may result in a late penalty and interest charges that could increase your tax bill by 25% or more.

     

    E-Filing Benefits

    The most convenient and efficient way to file your tax return is to file it electronically. You may still mail your return, but it will most likely take longer to process and you’ll have to wait longer for any tax refund you’re due. Here are some of the benefits of e-filing:

    • Accuracy – IRS studies show that e-filing your taxes greatly reduces errors on returns: the error rate of e-filed returns is 1%, versus 20% for paper returns.
    • Security – privacy and security are guaranteed. You can choose a five-digit PIN as your electronic signature, and the IRS keeps your information private.
    • Proof of acceptance – within 48 hours, the IRS will send you an electronic acknowledgment that it accepted your return. If it did not accept your return, the IRS will send you a rejection notice that will show the errors it found on your return.
    • Fast refunds – receive your refund faster than with a paper return.

    How to E-File

    To e-file your return, it must be prepared using tax preparation software. You can choose to have your return prepared by a tax professional or you can use one of the many tax preparation programs that are available to do-it-yourselfers. TaxNFS.com  is easy-to-use tax preparation that is affordable and simple.

    Where to File

    If you elect to paper file your return, the address you will send your tax return to depends on the state you live in and what type of form you are filing. Please visit the IRS.gov website for more information.

    Form 1040
    Form 1040A
    Form 1040EZ
    Form 1040X
    Form 1040ES
    Form 1040V
    Extensions (Form 4868)

    Getting a Copy of Your Return

    There are times when you may need to get a copy of a return from a prior year. You can get this by contacting the IRS by phone or mail.

    Tax Return

    A copy of a previously processed tax return is available for the current year and six previous calendar years. There is a $57 processing fee for each tax period you request.

    Tax Return Transcript

    A tax return transcript will show most line items from the tax return that you originally filed. Any changes to your return after it was originally filed will not be reflected in the transcript. Most lending institution will accept a tax return transcript to verify your income. There is no processing fee for requesting a tax return transcript.

    Tax Account Transcript

    A tax account transcript will show any adjustments that were made to your tax return after you originally filed it. The transcript shows only basic data, not the entire tax return. There is no processing fee for requesting a tax return transcript.

    To Request Information

    Phone: (516) 565-2025 or IRS at 1800-829-1040

    Mail:

    • Tax Return Transcript: Use the IRS’s online tool to order a transcript online.
    • Tax Return: Complete Form 4506 and mail it to the appropriate address on the form

     

     

    Tax Year 2012 Tax Rates and Brackets

    Tax rate schedules help you estimate your federal income tax. The tax tables are based on your expected filing status.

    The actual amount of your income tax is figured on Form 1040, 1040A, or 1040EZ.

    Single

    If taxable income is more than … but not
    more than …    		 the tax is …
    $0 $8,700 10% of the taxable income
    $8,700 $35,350 $870.00 plus 15% of the amount over $8,700
    $35,350 $85,650 $4,867.50 plus 25% of the amount over $35,350
    $85,650 $178,650 $17,442.50 plus 28% of the amount over $85,650
    $178,650 $388,350 $43,482.50 plus 33% of the amount over $178,650
    $388,350 no limit $112,683.50 plus 35% of the amount over $388,350

    Married Filing Jointly or Qualifying Widow(er)

    If taxable income is more than … but not
    more than …    		 the tax is …
    $0 $17,400 10% of the taxable income
    $17,400 $70,700 $1,740 plus 15% of the amount over $17,400
    $70,700 $142,700 $9,735 plus 25% of the amount over $70,700
    $142,700 $217,450 $27,735 plus 28% of the amount over $142,700
    $217,450 $388,350 $48,665 plus 33% of the amount over $217,450
    $388,350 no limit $105,062 plus 35% of the amount over $388,350

    Married Filing Separately

    If taxable income is more than … but not
    more than …    		 the tax is …
    $0 $8,700 10% of the taxable income
    $8,700 $35,350 $870 plus 15% of the amount over $8,700
    $35,350 $71,350 $4,867.50 plus 25% of the amount over $35,350
    $71,350 $108,725 $13,867.50 plus 28% of the amount over $71,350
    $108,725 $194,175 $24,332.50 plus 33% of the amount over $108,725
    $194,175 no limit $52,531 plus 35% of the amount over $194,175

    Head of Household

    If taxable income is more than … but not
    more than …    		 the tax is …
    $0 $12,400 10% of the taxable income
    $12,400 $47,350 $1,240 plus 15% of the amount over $12,400
    $47,350 $122,300 $6,482.50 plus 25% of the amount over $47,350
    $122,300 $198,050 $25,220 plus 28% of the amount over $122,300
    $198,050 $388,350 $46,430 plus 33% of the amount over $198,050
    $388,350 no limit $109,229 plus 35% of the amount over $388,350
     

     

     

     

     

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