Everything You Need to File Your Taxes for 2019
If you’ve got a job with a regular paycheck, you’re almost certainly already paying taxes. While your employer withholds the taxes you owe on your earnings and sends them to the federal and state governments, there's a lot more to the process to make sure you're paying taxes appropriately.
Why You Need to File a Tax Return
For starters, your payroll withholding usually isn’t exactly right: The decisions you make when you set up your payroll withholding at the beginning of your employment can result in you under- or over-paying your taxes.
Further, you may be able to reduce the taxes you owe—and thus, get a refund on taxes you already paid—by taking certain deductions or credits provided for in the tax code. On the flip-side, you might have additional income not included in your paycheck that you’re legally required to report, which may result in you owing more in taxes.
The result of all this is that you’re required to file a tax return every year. The process determines whether you owe additional taxes beyond what you’ve already paid to the federal and state governments, or if you’re owed a refund of the taxes you’ve already paid. Your tax return for the tax year is due on or near April 15 of the following year.
On Friday, March 20, Treasury Secretary Steven Mnuchin announced on Twitter that Tax Day, the deadline for individual returns for the 2019 tax year, would be pushed from April 15 to July 15. On Saturday, March 21, 2020, the IRS confirmed this on its website, stating that Tax Day 2020 is now July 15, 2020.
How to File a Tax Return
There are three main ways to file your taxes:
- File your taxes manually by filling out a Form 1040 according to instructions provided by the IRS. Mail the form to the IRS, along with any payments you owe.
- Use a tax software program or the website of a service like TurboTax or H&R Block. The service will walk you through a series of questions about your income and potential deductions, fill out your 1040, and (if you so choose) file it electronically for you.
- Get professional help from an accountant or tax preparer, who will work with you to maximize your refund and fill out your tax return on your behalf.
The first option is free. If you go with the second option, you’ll likely need to pay a fee, though some programs now offer free filing if your return is simple enough. The third option—professional help—will almost certainly cost you money.
How Your Taxes Are Determined
How much you need to pay in taxes is determined primarily by your total income. The federal government uses a progressive tax system, which means that the more money you make, the higher your effective tax rate is. These rates are determined by tax brackets. For instance, for tax year 2020 (which you will file in 2021), if you're single and made between $85,525 and $163,300, you’re in the 24% tax bracket. However, only the portion of your income above $85,525 will be charged at that 24% rate.
If you have a regular job, your employer will give you a form called a W-2. This includes information on how much they paid you and how much has already been deducted in taxes. This information is then transferred to your tax return and is the main method for determining how much you owe—or are owed—in taxes. Self-employed people and contractors use similar forms called 1099s, and other forms may be issued to you from banks and investment firms where you’ve accumulated interest income. The income information here is all transferred to your 1040.
However, the amount of your income that’s actually taxable can be reduced by what are known as deductions. For instance, if you gave $2,000 to qualifying charities and nonprofits in 2019 and itemize your deductions, you can deduct that when you file your taxes in 2020. This doesn’t mean that your total tax bill gets reduced by $2,000, but rather that the income figure used to determine your tax bill is lowered by this much—which, in turn, lowers your effective tax rate by some amount.
Tax filers may choose to itemize such deductions, but there’s also a standard deduction that, for many filers, may wind up being higher than the total of their itemized deductions. A tax program or preparer will be able to make this decision easy.
Getting That Tax Refund (or Paying That Bill)
Once you’ve entered all the relevant information about your income, deductions, and credits, you’ll be able to determine the balance—whether you owe money, or if you’re owed a tax refund. If you owe money, you’ll probably just send that money to the appropriate government agencies (the IRS and/or your state’s department of revenue) along with your tax return. If it’s more than you can pay all at once, you’ll be able to set up a payment plan. If you’re owed a refund, you have a few options for receiving your payment(s), including a mailed check or direct deposit into a bank account.
Don’t forget to save a copy of your tax return for your records—it will come in handy when you’re doing your taxes next year, and it will really come in handy if the IRS has questions or decides to audit you.
IRS. "Tax Withholding: How to Get It Right." Accessed March 20, 2020.
Nationwide. "Three Easy Ways to File Taxes." Accessed March 20, 2020.
IRS. "IRS Provides Tax Inflation Adjustments for Tax Year 2020." Accessed March 20, 2020.
TaxAct. "What Is W-2 Form and How Does It Work?" Accessed March 20, 2020.
IRS. "Credit & Deductions for Individuals." Accessed March 20, 2020.
IRS. "Apply Online for a Payment Plan." Accessed March 20, 2020.
IRS. "What to Expect for Refunds This Year." Accessed March 20, 2020.