As tax season approaches, many individuals are beginning to prepare their tax returns for the 2015 tax year. Filing taxes can be a complex process, but understanding the steps involved can make it easier to navigate.
Whether you’re filing for the first time or looking for a refresher, here’s a step-by-step guide to filing taxes for 2015.
Who is Required to File Taxes for 2015?
Not everyone is required to file a tax return, but if you meet certain income thresholds or have specific circumstances, you must file. Generally, you need to file a return if:
- Your income is above the filing threshold based on your filing status, age, and type of income. For example:
- Single filers under 65 needed to file if their gross income was at least $10,300.
- Married couples filing jointly under 65 needed to file if their combined gross income was at least $20,600.
- Heads of Household under 65 needed to file if their gross income was at least $13,250.
- You are self-employed: If you earned $400 or more in net income from self-employment, you must file a tax return, regardless of your total income.
- You owe special taxes: If you owe certain taxes, such as the alternative minimum tax (AMT) or household employment taxes, you must file.
- You received advance premium tax credits: If you were enrolled in the Health Insurance Marketplace and received premium tax credits in 2015, you must file a tax return to reconcile those credits.
- You qualify for certain credits: Even if you didn’t meet the income thresholds, you may still need to file to claim refundable tax credits such as the Earned Income Tax Credit (EITC) or the Child Tax Credit.
- You had any other special circumstances: For instance, if you had taxes withheld from your pay but you didn’t earn enough to be required to file, you may want to file to get a refund of those taxes.
1. Gather All Necessary Documents
Before you start filing, it’s important to gather the necessary documents. These documents will help you accurately report your income, deductions, and credits. Key documents to have on hand include:
- W-2 Form: This form reports the wages you earned from your employer and the taxes withheld from your paycheck.
- 1099 Forms: If you’re a freelancer, contractor, or received other forms of income, you’ll need the appropriate 1099 forms (e.g., 1099-MISC for freelance income, 1099-INT for interest income).
- Receipts for Deductions: If you plan to itemize deductions (e.g., for medical expenses, charitable donations, or mortgage interest), gather the receipts and records for these expenses.
- Proof of Health Insurance: If you were covered by health insurance in 2015, you should receive a Form 1095-A, 1095-B, or 1095-C, which shows proof of coverage.
2. Choose the Correct Tax Form
The IRS provides several tax forms, but most individuals will need to file Form 1040. However, there are two other forms that may be suitable for certain taxpayers:
- Form 1040EZ: A simplified version of the 1040 form for those with no dependents, no itemized deductions, and an income below $100,000.
- Form 1040A: A middle ground between the 1040 and 1040EZ, for taxpayers who want to claim certain deductions or credits but don’t need to itemize.
3. Calculate Your Taxable Income
Your taxable income is the total amount you earned during 2015 minus any deductions. Deductions can be either the standard deduction or itemized deductions.
- The standard deduction for 2015 was:
- $6,300 for single filers
- $12,600 for married couples filing jointly
- $9,250 for heads of household
- Itemized deductions may include:
- Mortgage interest
- Medical expenses (if they exceed a certain percentage of your income)
- Charitable donations
If you choose to itemize, make sure you have detailed records of all your deductible expenses.
4. Claim Credits and Deductions
There are various credits and deductions available to help reduce your tax liability, including:
- Earned Income Tax Credit (EITC): A credit for low to moderate-income working individuals and families.
- Child Tax Credit: A credit for taxpayers with dependent children.
- Education Credits: Credits like the American Opportunity Credit and the Lifetime Learning Credit for students or their parents.
Make sure you review all available credits and deductions, as they can significantly reduce the amount of tax you owe.
5. File Your Taxes
Once you’ve filled out the necessary forms, it’s time to file your taxes. You can choose to file your return:
- Electronically: Filing online is the fastest and most secure way to submit your tax return. The IRS offers a Free File program for eligible taxpayers (those with an income of $62,000 or less in 2015).
- By Mail: If you prefer to file on paper, print out your forms and mail them to the appropriate IRS address. Be sure to check the correct mailing address based on your state of residence.
The deadline to file your 2015 taxes is April 18, 2016, for most taxpayers. If you need additional time, you can request an extension to file by October 17, 2016. However, an extension to file does not extend the deadline to pay any taxes owed, so it’s important to estimate and pay any taxes due by the original deadline.
6. Pay Any Taxes Owed
If you owe taxes, the IRS offers various options for payment, including:
- Direct payment from a bank account
- Paying by check or money order
- Using a credit or debit card (with a processing fee)
If you’re unable to pay your tax bill in full, the IRS offers payment plans. You can apply for a short-term payment plan (less than 120 days) or a long-term installment agreement.
7. Keep Your Records
After filing your taxes, it’s important to keep a copy of your tax return and supporting documents for at least three years. This is useful in case the IRS audits your return or if you need the records for future reference.
Conclusion
Filing your 2015 taxes can seem overwhelming, but by following these steps and staying organized, you can simplify the process. Whether you choose to file online or on paper, ensure that all your information is accurate and complete.
If you’re unsure about any aspect of your tax return, consider seeking help from a tax professional to ensure you’re taking advantage of all the credits and deductions available to you.
Don’t forget to file by the deadline and, if needed, pay any taxes owed.
Also Read
Entergy’s Operation Secret Santa Brings Holiday Joy to Families in Need
KULR Technology Stock Soars to All-Time High: Is It a Buy?