Frequently Asked Questions - Filing your Returns
  • What Tax Forms Should I File ?
  • Should I still file by the April 15th deadline if I don't have the money to pay my taxes ?
  • What happens if my tax return is filed late ?
  • Is it better to file my return early or should I wait until the April 15th deadline ?
  • Does a tax return have to be filed in behalf of someone who died this year ?
  • Can a surviving spouse still file a joint return for the year the death occurred in ?
  • Do college students need to file income tax returns ?
  • Should I E-File or Paper File?
  • How to prepare my tax return for mailing?
  • Payment Methods Accepted by the IRS

  • What Tax Forms Should I File ?

    1.  1040EZ, or 1040A, or 1040 ?

    Form 1040EZ is the simplest of the forms to use. You can use this Form  if you meet all of the following requirements:
    • Your filing status is single or married filing jointly
    • You (and your spouse if married filing a joint return) are not 65 or older or blind
    • You do not claim any dependents
    • Your taxable income is less than $100,000. Your income is only from wages, salaries, tips, unemployment compensation, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less
    • You did not receive any advance earned-income credit payments
    • You do not claim a student loan interest deduction or an education credit
    • If you were a nonresident alien at any time in the year, your filing status is married filing jointly
    • If you do not itemize deductions, claim any adjustments to income or tax credits other than the earned-income credit, or owe any taxes other than the amount from the tax table.

    1040A lies somewhere in between 1040EZ and 1040. To use it, your total taxable income must be less than $100,000, but your taxable interest and dividends can be more than $1,500. This form does not allow you to itemize, but it does permit you to deduct an IRA contribution and claim the child-care credit.

    Form 1040 is the longest, most used and least simple of all. This is the form that allows for itemized deductions to be claimed. You'll be required to fill out the 1040 if your taxable income is $100,000 or more, or you receive certain types of income such as rent or capital gains. In order to itemize on the 1040, you must fill out an additional form called Schedule A, which will help you figure out the value of your itemized deductions.

    2.  When should I file Schedule A ?

    If your deductible personal and family expenses, as defined by the IRS, add up to more than the standard deduction for your filing status, and you have the records to prove them, you should itemize your deductions instead of claming the standard deduction. To do that, you'll have to file Form 1040, and complete Schedule A and attach it to your tax return.

    Schedule A divides your itemized deductions into six major categories:

    • medical and dental expenses
    • state and local taxes
    • interest
    • gifts to charity
    • casualty and theft losses
    • miscellaneous deductions

    2.  What tax schedule do I use to report interest and dividend income ?

    If you received more than $1,500 in dividend or interest income for the year, your tax return will have to be accompanied by Schedule B, Interest and Dividend Income. Schedule B is broken down into three parts. Part I is where you list all your interest income. Part II is where you list all the information about your dividend income. Part III asks about any foreign accounts or foreign trusts that you might be involved with.

    3.  What tax schedule do self-employed individual fill out?

    If you are the sole owner of a business or operate as an independent contractor, you will need to file a Schedule C to report income or loss from your business activities. If you have $400 or more of business income over and above your expenses, you need to file a Schedule C or C-EZ, and a Schedule SE to pay self-employment tax, even if you would not otherwise have enough income to be required to file a tax return.

    4.  What tax form do I use to claim unreimbursed employee business expenses ?

    The IRS will let you deduct employee business expenses that your employer will not reimburse you for. The form you need to fill out to claim these write-offs is IRS Form 2106, Unreimbursed Employee Business Expenses. Among the most common deductions claimed on this form are the use of your car to perform your job, work-related travel expenses and business meals. You can choose to file a regular Form 2106, or you may qualify for the shorter and simpler Form 2106-EZ.

    5.  What tax schedule do I use to report capital gains and losses ?

    If you sold or exchanged any securities or certain other property during the tax year, you will probably have to complete Schedule D, Capital Gains and Losses. Schedule D can be highly annoying, especially if you are an active investor who buys and sells often. Beginning in 1998, if you sell your principal home and can exclude all of the gain (up to $500,000 for married couples filing a joint return and $250,000 for single filers), you do not need to report the sale on your tax return. If you cannot exclude all of the gain, you must report the sale on Schedule D.

    6.  What tax schedule do I use to report supplemental income and loss ?

    Schedule E, Supplemental Income and Loss, is one of the IRS' most difficult forms. Unfortunately, you will probably have to fill it out and attach it to your federal tax return if you were involved with rental real estate, invested in a partnership, had certain other investments or income, or were involved in a trust or "S corporation."

    7.  What tax form do I use to pay estimated tax ?

    IRS Form 1040-ES , Estimated Tax for Individuals, is the form you must use to pay your estimated tax. You pay estimated taxes when you have income that is not subject to withholding.


    Should I still file by the April 15th deadline if I don't have the money to pay my taxes ?

    It is definitely in your best interest to at least file by the deadline, even if you can't pay for your taxes then. The penalty for failing to file a tax return by the deadline is %5 per month of the owed taxes. However, as long as you file by the deadline, even without payment, the penalty is only 5% per month of the owed taxes. Partial payment will lessen the penalty, so if possible, include a check with your return, even if it is not for the total amount due.

    What happens if my tax return is filed late ?

    If filed late without reasonable cause, a penalty for each month the return is late may be imposed. The IRS will also charge interest on the tax you owe

    Is it better to file my return early or should I wait until the April 15th deadline ?

    Whether to file your return early or not really depends on whether you expect to receive a refund or expect to owe money to the IRS. Generally speaking, people who are going to receive a refund usually do, and should, file early while people who owe the IRS should wait until closer to the deadline to pay. Why part with your money unnecessarily early?


    Does a tax return have to be filed in behalf of someone who died this year ?

    As morbid as it may sound, an income tax return still has to be filed for someone who died during the year. The burden of filing the tax returns falls upon a survivor or the executor of the estate. Regardless of when the death occurs, the taxable year for the deceased is still the normal tax year. Medical deductions can be taken on expenses incurred within one year of the death on either the dead person's final return or on the estate taxes' return--not both.

    Can a surviving spouse still file a joint return for the year the death occurred in ?

    Yes, you may file a joint return if you are newly widowed. You may even be able to file jointly up to 2 years after the death of a spouse if you meet certain requirements. As long as you were entitled to file a joint return the year your spouse died, your children qualify as dependents and your home is their primary residence, you have not remarried and you support your household by providing over half the cost of maintenance, you may file a joint return for two years following the death of a spouse.

    Do college students need to file income tax returns?

    Whether or not an individual student has to file an income tax return depends on whether the student is claimed as a dependent on parent's tax returns and whether the student earns income. You do not have to file if you are a student and your parents claim you on their tax returns and you made less than $12,000 in earned income or your unearned income combined with your earned income was less than $1,000.


    Should I E-File or Paper File?

    Submitting your tax return by e-file and mailing it on paper are the only two ways to send your tax return to the IRS. E-file is faster, safer, and generally more convenient than paper filing. Filing on paper is generally cheaper, and refunds take longer.

    E-file benefits
    Electronically submitting your tax return to the IRS is faster, more convenient, and more secure than paper filing. But in order to e-file your return you have to have your taxes done by a tax preparer, prepare them yourself using tax software, or use one of the "Free File" web software programs.

    Confirmation from the IRS
    The biggest benefit for electronic filing: you will receive a confirmation that the IRS has received your tax return. This is proof that the IRS received your tax return and has started processing it. If the IRS does not accept your tax return, you will get a rejection notice. The confirmation or rejection notice is sent within 24 hours of transmitting your return. The IRS e-file rejection letter will tell you how to fix your tax return so it will be acceptable to the IRS.

    Faster and More Accurate
    E-filing has some added benefits too. Your refund is likely to be processed faster. E-filing means the IRS does not have to re-type your tax return at their service center, which means less chance that the IRS will make a mistake when processing your return.

    E-file limitations
    Electronically is not for everyone, though. You must file on paper if you are:
    - Married, but filing a separate return, and you live in a community property state
    - Claiming a dependent who has already been claimed by someone else
    - Submitting a tax form that cannot be electronically filed (such as a multiple support agreement)
    - Filing before e-file begins (January 15) or after e-file ends (October 15)


    How to prepare my tax return for mailing ?

    Filing on paper is the best option for you if you have a fairly simple tax return, or if you are not eligible for e-filing. Because the IRS re-types every paper return it receives, you should seriously consider e-filing if you have a more complex tax return.

    Your tax return is complete and ready to be mailed. Now what? The IRS recommends that you take a few minutes to make certain that all information is complete and accurate before sealing that envelope. This simple precaution could help you avoid mistakes that may delay your refund or result in correspondence with the IRS.

    Here are just a few items to complete prior to mailing your tax return:

    • Sign your return. Your federal tax return is not considered a valid return unless it is signed. If you are filing a joint return, your spouse must also sign.

    • Provide a daytime phone number. This may help speed the processing of your return if the IRS has questions about items on your return. If you are filing a joint return, you may provide daytime phone numbers for either you or your spouse.

    • Assemble any schedules and forms behind your Form 1040 or 1040A in the order of the "Attachment Sequence No." shown in the upper right hand corner of the schedule or form. Arrange any supporting statements in the same order as the schedules or forms they support and attach them last.

    • Attach a copy of Forms W-2, W-2G and 2439 to the front of Form 1040. Also attach Forms 1099-R if tax was withheld.

    • Use the coded envelope included with your tax package to mail your return. If you did not receive an envelope, check the section called "Where Do You File?" in your tax instruction booklet or click here to find the Internal Revenue Service Center address for your tax area.

    • If you owe tax, make your check or money order payable to the "United States Treasury." Write your name, address, Social Security number, daytime telephone number, tax return year, and appropriate form number(i.e."2002 Form 1040") on your payment. Then complete Form 1040-V following the instructions on that form and enclose it in the envelope with your payment. Do not staple the payment to your return.


    Payment Methods Accepted by the IRS

    • Personal Check or Money Order

      This is the traditional method of paying when mailing a paper return. Be sure to write your Social Security number in the memo field.

      Check sample:

    • Direct Debit

      If you are filing a return electronically, direct debit may be the solution. The IRS will debit a checking or savings account. The plus side to direct debit is that you can specify the date of this debit which means you can file early and still not pay until April 15th.
      Click here for details

    • Credit Card

      American Express, MasterCard or Discover can be used to charge taxes due by calling either Official Payments Corp. at 1-800-2PAY-TAX. You can also pay by credit card over the Internet at A convenience fee is applied at the time of payment.

    • Installment agreement

      If you're financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.
      Read more here