How to file taxes: A comprehensive checklist

Whether you’re filing your taxes for the first time, need a quick refresher, or simply want to optimize the process, understanding how to do taxes is a vital life skill. Each year, millions of people wonder how to file taxes, and with good reason—there’s a lot of paperwork, deadlines, and details to keep track of. Filing your taxes correctly and on time helps you avoid costly penalties and ensures you get any refunds or credits you’re entitled to.

Below is a step-by-step tax checklist to help you feel confident as you learn how to file your own taxes. We’ll outline everything you need to know, from understanding the basics of tax returns to submitting your forms and planning for next year. Let’s dive in.

Use the links below to jump to specific sections:

1. Understanding the Tax Filing Process
2. Who Needs to File Taxes?
3. When Are Taxes Due?
4. How Can I File My Taxes?
5. Step 1: Gather All Essential Tax Documents
6. Step 2: Choose the Right Tax Filing Status
7. Step 3: Determine Your Tax Deductions & Credits
8. Step 4: Calculate Your Taxable Income
9. Step 5: Fill Out the Right Tax Forms
10. Step 6: Submit Your Tax Return
11. Step 7: Plan for Next Year’s Taxes

Understanding the tax filing process

Every year, people file taxes to report their income, claim deductions and credits, and ensure they pay the correct amount of tax. Taxes themselves are mandatory payments made to federal, state, and local governments that fund public services and infrastructure—everything from public schools and healthcare to roads, law enforcement, and national defense.

What are tax returns?

The term “tax return” refers to the forms you submit to the IRS (and sometimes to your state) to report your income and calculate the taxes you owe (your tax liability). Filing your “return” is how you update the IRS on your financial life, ensuring that your total taxes paid match what you actually owe (your tax liability).

If you have taxes taken out of (withheld) from your paycheck—or pay estimated taxes—and later realize you’ve paid more than you owe, the IRS issues you a refund. If you paid too little during the year, you’ll have what’s called a “shortfall” and have to make a payment to the IRS.

When are taxes due?

For most taxpayers, the federal tax deadline is April 15 (or the next business day if the 15th falls on a weekend or holiday). State tax deadlines may vary, but they often coincide with the federal deadline. If you can’t file by the due date, you can request an extension, which typically pushes your filing deadline to mid-October.

However, keep in mind that an extension to file is not an extension to pay—if you owe taxes, you’re still expected to pay the estimated amount by the April deadline. Not paying by the due date may result in penalties and interest. If you can’t pay the full amount, you may qualify for a payment plan through the IRS, but you should file on time (or file an extension) to avoid a failure-to-file penalty.

For small business owners, filing deadlines can vary based upon the type of business so make sure you know your deadlines for both business and personal tax returns.

How can I file my taxes?

There are two things to consider here – how to actually file your return and how to prepare your return.

When it comes to preparing your returns, you have a few options:

• Free file: If your income meets certain thresholds, you can use the IRS Free File platform and preferred partners to prepare and e-file at no cost.
• Tax software: Programs like TurboTax, H&R Block, and other providers guide you step by step. They often come with various support options and can auto-fill forms.
• Hiring a professional: A tax professional can handle complex tax situations and offer personalized advice, potentially saving you money in the long run.

When it comes to filing your return, you have two options:

• File electronically (e-file): The most popular method—faster, more secure, and generally easier to complete. Refunds also tend to arrive more quickly when you e-file.
• Mail in your return (paper filing): You can mail a completed paper return to the IRS, but this method takes longer to process and is more prone to errors.

When deciding how to file your own taxes, consider your budget, the complexity of your return, and how comfortable you are with tax regulations.

Step 1: Gather all essential tax documents

Before you start filling out any forms, organize your documents. It’s easy to make mistakes if you don’t have everything you need in front of you. Having a checklist for taxes is a great way to ensure nothing slips through the cracks.

Personal information

• Social Security numbers (or Individual Taxpayer Identification Numbers) for you, your spouse, and any dependents (like children).
• Bank account and routing numbers if you want your refund via direct deposit or if you have to make a payment.

Income documents

• W-2 forms from each employer.
• 1099 forms for any freelance or contractor work (1099-NEC), investment income (1099-DIV, 1099-INT), or retirement distributions (1099-R).
• Self-employment income records if you run your own business or have side hustle earnings.
• Alimony received, rental income, or other miscellaneous income.

Tip: If you’re missing a W-2 or 1099, contact your employer or the client that paid you  immediately. You can also request a wage and income transcript from the IRS as a last resort.

If you’re wondering which of these forms you should keep an eye out for, you aren’t alone. A simple way to avoid missing any reportable income is to make a list of what could be reportable in the first place. Here’s a way to think about it:

• Income from work like your primary job, side hustles, and even stock options.
• Income from investments like a taxable investment account that has capital gains.
• Income from real estate like a rental property (even if you rent out part of your home).
• Income from other sources like trusts or royalties (for you book writers or oil tycoons out there).

Keep in mind that taxable investments aren’t actually taxed unless you sell them or if they pay a distribution to you in the form of a capital gain or dividend, and retirement accounts (like a 401(k), IRA) are not taxed until you take the money out.

Documents for possible deductions

Deductions are another way of saying ‘things I can subtract from my income before I have to pay taxes.’ So if you have $100,000 of income and $20,000 in deductions, you only have to pay taxes on the $80,000 of income. 

Here are the main deductions most people can use:

• Mortgage interest statements (Form 1098).
• Student loan interest statements (Form 1098-E).
• Property tax bills (if you own a home)
• Charitable donation receipts.
• Medical expense receipts if you plan to itemize.
• Any other receipts or documentation related to deductions you plan to claim.

We will talk more about deductions in a minute.

Organizing all of these documents in a dedicated folder or digital file can save you from a last-minute scramble, reduce errors, and save you time in the process.

Step 2: Choose the right tax filing status

Your filing status determines your tax brackets, standard deduction, and what credits you can claim. The main statuses include:

1. Single: If you’re not married and don’t qualify for another status.
2. Married filing jointly: Most married couples choose this for a potentially lower tax liability.
3. Married filing separately: Sometimes chosen if one spouse has high medical expenses, higher student loan debt, or other specific deductions.
4. Head of household: Typically for single individuals who pay more than half the cost of maintaining a household and have a qualifying dependent.
5. Qualifying widow(er): For individuals whose spouse has passed away recently and who meet specific criteria.

People often ask if they have to file as a married couple. If you are married on 12/31 of the tax year, you have to file as married. If you want to explore the tax impact of jointly vs separately, it’s generally recommended that you speak with a tax professional.

Step 3: Calculate your total income

Your total income is essentially all of your income sources put together. So, if you completed Step 1 successfully (gathering and organizing your documents), this step should be easier.

• Total earned income (e.g. $100,000 from your  day job)
• Self-employed income (e.g. $20,000 from that side hustle)
• Total income from investments (e.g. $10,000 in capital gains + $5,000 in dividends)**
• Retirement plan distributions (e.g. money you take out of an IRA)
• Social Security income (if any)
• And income from rental real estate, trusts, and anywhere else.

From here, you’ll move on to determine all of the items you can use to lower your taxable income or to lower your tax bill.

**Important point: Long-term capital gains (investments you have held for more than 12 months) and qualified dividends are taxed at more favorable capital gains rates (typically 15%) so make sure you don’t overpay.**

Step 4: Determine your tax deductions & credits

Tax deductions reduce the amount of your income that’s subject to tax. Tax credits, on the other hand, reduce the actual tax you owe—dollar for dollar. Knowing what deductions and credits you qualify for can significantly lower your overall tax bill and boost your potential refund.

Standard deduction vs. itemized deductions

There are two ways to claim deductions. Think of a deduction as something that you subtract from your income before you have to apply taxes to it. Those two options are:

• Standard deduction: A fixed amount that reduces your taxable income. Here are the deduction limits for 2024:

• Itemized deductions: If you have significant deductible expenses—like mortgage interest, property taxes paid on your home, charitable contributions, or even medical costs not covered by insurance—you might save more money by itemizing. You’ll use Schedule A to list these expenses.

Which one should you use? A good rule of thumb is to calculate whether your itemizable expenses exceed the standard deduction. If they do, itemize. If not, the standard deduction is the easier and more beneficial route.

Common tax credits to consider

1. Earned Income Tax Credit (EITC): For low-to-moderate-income workers, can result in a substantial refund.
2. Child Tax Credit: Available to taxpayers with qualifying children under certain age limits.
3. Education Credits: Such as the American Opportunity Credit or Lifetime Learning Credit for students.
4. Energy Efficiency Credits: For homeowners making qualifying energy-efficient home improvements.

Each credit has its own eligibility criteria, so double-check requirements and file the necessary forms. Eligibility is usually tied to how much money you make so the more you make, the less likely you are to qualify for various credits.

For a complete list of tax credits, check out the IRS website for more information.

Step 5: Use the right tax forms & calculate your taxable income

Form 1040 is like the hub of your entire income tax return. There are various other “schedules” (forms for reporting income and expenses) that report income from different sources (listed below), but they all eventually feed back into your 1040.

• Schedule 1: For additional income such as unemployment or business income, and adjustments like student loan interest.
• Schedule 2: For additional taxes, including self-employment tax.
• Schedule 3: For additional tax credits and payments.
• Schedule A: Itemized deductions.
• Schedule C: If you are self-employed.
• Schedule D: For reporting capital gains and losses.
• Schedule E: Supplemental income and loss (real estate, trusts, S-Corps)

Tax software can help auto-fill these forms based on your answers to a series of questions. A tax professional can also make sure you’re filling out all the necessary paperwork, especially if your situation is more complex.

Your taxable income should automatically be calculated if you get all of this right. However, your taxable income is simply all of your income sources from Step 3 minus your deductions from Step 4.

From there, you’ll use the IRS tax brackets to determine your tax rate. Tax brackets are progressive, meaning different portions of your taxable income are taxed at different rates.

Step 6: Ready, set, file!

Once your forms are complete, double-check the information to make sure there are no typos or math errors. Simple mistakes can delay your refund or trigger notices from the IRS.

Filing electronically vs. paper filing

• E-file: Most people file electronically because it reduces errors, processes faster, and often results in quicker refunds.
• Paper return: If you prefer paper, you can print and mail the forms to the IRS. Make sure to use the correct mailing address based on your location and whether you are including a payment.

How long does it take to file taxes?
Filing electronically can be done in as little as 30 minutes to a few hours if your return is straightforward. More complex returns can take longer, especially if you’re itemizing or have multiple sources of income. Paper filing tends to be a slower process overall.

How to check your tax return status

After you submit your return, you can track your refund using the IRS “Where’s My Refund” tool. Generally, you’ll see an update within 24 hours of e-filing or about four weeks after mailing a paper return.

Step 7: Plan for next year’s taxes

Tax filing isn’t just a once-a-year event. Proactive tax planning can help you minimize your tax liability, avoid surprises, and even ensure that you’re taking advantage of every deduction and credit available. Here are a few steps you can take:

Adjusting tax withholding

If you consistently owe money each year—or regularly receive a large refund—you might need to adjust how much tax is withheld from your paycheck. You can do this by updating your Form W-4 with your employer to more accurately match your tax obligations.

Setting up estimated tax payments

Freelancers, independent contractors, or those with significant non-wage income often need to pay quarterly estimated taxes. This helps prevent underpayment penalties and large lump-sum payments at the end of the year.

Organizing tax documents year-round

Instead of scrambling for receipts in April, save digital copies of important financial documents in a dedicated folder. This is especially helpful if you have itemized deductions or multiple income streams. You can make this a habit each time you receive a statement, invoice, or receipt.

Finally, if you want to deepen your understanding and maximize your earnings—especially when dealing with investments, capital gains, or more advanced tax strategies—you might consider working with a CFP(R) Professional for tax planning services. A comprehensive approach to your finances can include investing, retirement planning, and even inheritance tax considerations. Thinking ahead can help you make smarter decisions year-round.

Extra tips & resources

• Extension: If you’re running out of time, you can file for an extension by the April deadline to push your filing date to October. Remember, any owed tax must still be paid by April to avoid penalties.
• Keep records: The IRS generally has up to three years to initiate an audit (and sometimes longer), so keep your tax returns and supporting documents for at least that long.
• Use your refund wisely: Consider using your tax refund to build an emergency fund, pay off debt, or invest in your future goals.
• Professional help: Complex returns or life changes—like marriage, divorce, inheritance, or a new business—often benefit from the expertise of a tax professional.

If you’re looking to simplify your taxes and achieve financial wellness, remember that tax planning is just one piece of the puzzle. A professional service like Facet can guide you through tax planning, investing, and other long-term strategies—helping you make informed decisions that align with your goals.

Ready to make tax season easier?

The more prepared and organized you are, the smoother the filing process becomes. This tax checklist can serve as your go-to guide each year, ensuring you have everything you need to file your taxes accurately and on time. By following these steps, you’ll not only feel more confident in how to file your own taxes but also set yourself up for a stronger financial future.

Life gets busy—but you don’t have to tackle this all on your own. If you’d like personalized help, don’t hesitate to reach out to a tax professional or explore comprehensive services at Facet. Our advisors can help you maximize your earnings and identify opportunities for long-term growth.

Get started today and take control of your taxes—so you can spend more time focusing on what truly matters to you. Here’s to a simpler, more empowered tax season!