Introduction:

Manually filing your tax returns in the US can seem like a daunting task, so we’ve created a simple checklist to make the process a whole lot easier.

If you feel unsure about how the individual tax preparation process works or why it's a must-do, find out more before getting started. 

Some additional resources you may find helpful are last year's 1040A form and a comprehensive instruction guide provided by the IRS. 

Personal Information:

The first step to completing your tax return form is filling in a few personal details so we can customise the checklist to suit your individual needs.

Enter names, address and other important details

Surprise surprise! To get the ball rolling you must enter your name and address. If you are married, you must also enter the name of your spouse.

Answer the other simple questions below so we can present you with tasks that are relevant to you and forego those that are not. 

Enter dates of birth

Enter your date of birth. If applicable, also enter the birth date of your spouse and any dependents you may have.

Enter social security numbers

Submit the social security number of your spouse and dependents in addition to your own

Gather your SSN numbers and have them ready to disclose. 

Attach copies of last year's tax returns

Disclose copies of the past year's tax return for you and your spouse

Enter your bank account and routing number

Enter your bank account and routing number if you would like your refund to be transferred via direct deposit.

Income:

The next step in filing your tax return is selecting your sources of income and disclosing them in full. 

This represents a big chunk of your form so be sure to take your time and get it right. 

Select all relevant sources income

This is where you must enter your personal sources of income such as salary, rental income, investments, business income and any other miscellaneous sources.

It is important that you answer the questions below so we can provide you with only the tasks that you need to complete.

Here's a simple walkthrough of how to calculate your adjusted gross income (AGI)

Attach your W-2 form

Along with disclosing your personal income, you must attach a copy of your W-2 form when filing for your individual tax return. 

In the case that tax was withheld, you must also attach form(s) 1099-R.

Report your refund with form 1099-G

Because you received unemployment compensation and/or a state or local tax refund last year, you will have been issued a Form 1099-G from your local government agency.

You need to report the refund if you deducted your state taxes last year.

If you are not sure whether this applies to you, find out more on the IRS website

Disclose income from investments

In addition to your personal income, you must disclose any income you have earned through investments. Investment income consists of:

  1. Interest payments (Form 1099-INT)This includes savings account, money market account and mutual funds.

  2. Dividends (Form 1099-DIV)This includes dividend income and interest income from shareholdings or mutual funds respectively.

  3. Capital Gains (Loss) (Form 1099-B)This includes the sale of stocks, bonds, mutual funds, real estate and collectibles.

  4. Undistributed Capital Gains - (Form 2439)This is a tax form provided for by the Internal Revenue Service (IRS) that informs a shareholder of any undistributed long-term capital gains

If any of these apply to you, be sure to download the relevant form(s), attach them below and to your final 1040 form. 

Disclose rental income

The money you receive for allowing other people to use your real estate or personal property is regarded as taxable rental income.

You are allowed to offset your rental expenses from your rental income. 

Use Schedule E Form 1040 to disclose rental income.

Disclose business income

Taxpayers with earnings from a business, freelance or contractor work are considered self-employed.

Report your business income and expenses using Schedule C Form 1040

Disclose farm income

Farmers, who are considered as self-employed, should report income and expenses from their farming business on Schedule F Form 1040.

Disclose financial benefits from health savings accounts

Form 1099-SA, titled "Distributions From an HSA, Archer MSA, or Medicare Advantage MSA", is given to those taxpayers who received financial benefits from health savings accounts (HSAs) or medical savings accounts (MSAs).

Disclose gambling winnings

Gambling winnings are fully taxable and must be reported on your tax returns in Form W-2G.

Gambling income comprises winnings from lotteries, raffles, horse races, and casinos. It also includes cash winnings and all prizes such as cars and trips priced at their fair market value.

Disclose alimony income

Alimony Income: Payments received from a spouse or former spouse under a divorce or separation instrument are considered alimony payments and are generally taxable income. Only cash payments, including checks or money orders, qualify as alimony.

A divorce or separation instrument is any of the following:

  • A decree of divorce or separate maintenance or a written instrument incident to that decree
  • A written separation agreement
  • A decree or court order requiring a spouse to make payments for the support or maintenance of the other spouse

Report alimony income directly on your 1040 form 

Disclose pensions & annuities

This is broken down into two parts (a & b). the 'a' part reports the gross amount of distributions you received from pensions and annuities, while the 'b' part reports the taxable portion of these distributions.

For example, you may have received a distribution of $12,000 from your 401(k) plan, but only $10,000 of that amount was taxable. The $12,000 gross amount would, therefore, go in line 'a', and the $10,000 taxable amount would go in line 'b'. Line 'b' is the amount that contributes to your overall taxable income.

Distributions from the following accounts are entered on this line of your tax return:

  • 401(k) plans
  • 403(b) plans
  • Civil Service Retirement System (CSRS)
  • Federal Employees Retirement System (FERS)
  • Foreign pension plans
  • Governmental 457 (b) plans
  • Thrift Savings Plan

Discover more about this section of the 1040 form if you feel unsure about what you need to do.

Report pensions & annuities directly on your 1040 form

For Homeowners:

As a homeowner, there are certain requirements that you must meet when filing your tax return. These include:

  1. Completing Your Mortgage Interest Statement - Form 1098
  2. Filing Your Property Taxes

Complete your mortgage interest statement

If you have received $600 or more from mortgage interest during the year you should file Form 1098.

Form 1098 also includes a section for you to declare mortgage insurance premiums. If you are paying a mortgage, chances are you are also paying mortgage insurance. Federally-backed loans, such as FHA loans, require that borrowers pay mortgage insurance, just as like private lenders and banks. Fortunately, mortgage insurance is a tax-deductible expense for most homeowners.

If you are unsure about what you need to do, read more about it on the IRS website.

Deduct your property taxes

If you pay taxes on your personal property and owned real estate, they may be deductible from your income tax bill.

You may be surprised at how much property tax you pay because a large percentage of homeowners pay it via their mortgage loan. If you fall into this category, it means you are still eligible to get a property tax deduction as the mortgage company has been paying the tax with your money.

Check the 1099-INT tax form the mortgage company is required to send you each year. Both the amount of mortgage interest paid for the year and the amount of property taxes paid annually should be listed. Enter the amount of interest you can deduct on Line 6 of Form 1040, Schedule A from the IRS.

Attach the form below once completed. 

Education:

For students and recent graduates, there a few ways to get some of your college expenses back in your pocket when filing for tax returns. 

Deduct interest paid on a student loan

If you have paid any interest on your student loan, you can receive a maximum deduction of $2,500.

This max is per return, not per taxpayer, even if both spouses on a joint return qualify for the deduction.

The student loan interest amount goes in Form 1040 - Adjustments Section.

Find out which requirements you must meet before filing. 

Deduct college expenses

There are two options for getting back some of the college expenses you have paid during the year. The first is the claim education credits, and the second is tuition and fees deduction.

Find out more to evaluate which is most suitable for you.

Family Costs:

Making sure you get your money's worth for taking care of you and your loved ones :) 

Claim child and dependent care credit

If you paid a daycare center, babysitter, summer camp, or other care providers to care for a qualifying child under age 13 or a disabled dependent of any age, you may qualify for a tax credit of up to 35 percent of qualifying expenses of $3,000 for one child or dependent, or up to $6,000 for two or more children or dependents.

Find out more to see if you meet the qualification requirements

Claim credit for adoption expenses

To claim the adoption credit or exclusion, you must complete Form 8839 and attach it to your Form 1040.  

In 2017, the maximum amount of tax credit for qualified adoption expenses was $13,570 per child. 

Find out more about Form 8839 to see if you meet the requirements and how you can go about completing it. 

Attach the form below once completed. 

Deduct medical and dental expenses

As is the case with Charitable Contributions, if you itemize your deductions for a taxable year in Schedule A Form 1040 you may be able to deduct expenses you paid for medical and dental care for yourself, your spouse, and your dependents. 

You may deduct only the amount of your total medical expenses that exceed 7.5% of your adjusted gross income. 

Find out more from the IRS website if you feel unsure about how to deduct your medical expenses.

Donations:

Certain donations you've made during the year could be eligible for deduction from your tax bill.

Deduct charitable contributions

If you have made any charitable donations during the year to qualified organizations, they may be deductible. They should be disclosed in the "Itemized Deductions" section of Section A Form 1040.

Read more to find out how you can get this done. 

Tax Deductions:

There are 4 types of deductible nonbusiness taxes:

  1. State and local personal property taxes
  2. State and local general sales taxes
  3. State, local and foreign income taxes
  4. State, local and foreign real estate taxes

"To be deductible, the tax must be imposed on you, and you must have paid it during your tax year. Taxes may be claimed only as an itemized deduction on Form 1040, Schedule A.pdfItemized Deductions." - IRS

NOTE: You can elect to deduct state and local general sales taxes instead of state and local income taxes, but you cannot deduct both.

You can read more about deductible taxes on this IRS webpage.

Deduct personal property taxes

You can deduct personal property taxes paid during the year as an Itemized Deduction in Schedule A Form 1040.

An example of personal property tax is the tax imposed on the value of a car and assessed as part of an annual vehicle registration fee.

Read more about filing your personal property tax if you feel unsure about what is eligible and how you go about disclosing them.

Deduct sales taxes

When using Schedule A Form 1040, Itemized Deductions, you can elect to deduct state and local general sales tax instead of state and local income tax.

Deducting sales tax instead of income tax might be useful if you live in a state without income tax or if you make a big-ticket purchase, such as a motor vehicle, before the end of the tax year.

More info is available on the IRS website.

Deduct foreign real estate taxes

This is often a complex area of tax filing for which it is recommended you seek professional advice. 

As is the case with other tax deductions, you report foreign real estate taxes in Schedule A Form 1040.

You can read about it in your own time to better understand how you might be eligible. 

Other Deductible Expenses:

Other expenses you can claim include:

  1. Work-related expenses
  2. Teacher/educator expenses
  3. Casualty and theft losses
  4. Lega fees

Claim work-related expenses

To claim work-related expenses like travel, uniforms, union dues, job hunting expenses and education, you must declare them as itemized deductions in Form 1040, Schedule A.

You can only deduct the portion of your work-related expenses that exceeds the IRS floor: 2% of adjusted gross income.

Claim teacher/educator expenses

If you are an eligible educator, you can deduct up to $250 of unreimbursed trade or business expenses. 

For details on how to submit this deduction on your 1040, review the guidelines provided by the IRS.

Claim casualty and theft losses

What qualifies as a casualty?

A casualty is damage, destruction, or property loss resulting from one of these identifiable events:

  • Sudden event — swift, rather than gradual or progressive
  • An unexpected event — ordinarily unanticipated and unintended
  • Unusual event — not a day-to-day occurrence

You can claim casualty and theft losses on personal property as itemized deductions. Use Form 4684 to figure your losses and report them on Form 1040, Schedule A.

Find out more details regarding what qualifies as a casualty or theft and how you claim losses from them. 

Final Forms:

Review & finalize supplementary forms

Check off the forms that apply to you once you have completed and reviewed them.

This is important to ensure that you have sufficiently met the requirements of your individual tax preparation. 

  • 1
    W-2
  • 2
    Schedule A (Itemized Deductions)
  • 3
    Schedule C (Profit or Loss from Business)
  • 4
    Schedule E (Real Estate Income)
  • 5
    Schedule F (Profit or Loss from Farming)
  • 6
    1099-G
  • 7
    1099-INT
  • 8
    1099-DIV
  • 9
    1099-B
  • 10
    1099-SA
  • 11
    Form 2439 (attached to 1120-RIC or 1120-REIT)
  • 12
    Form 1098
  • 13
    Form 8839
  • 14
    Form 4684

Attach final 1040 form

Review your completed 1040 with a professional

You're almost there! 

Once you feel confident that you have completed your 1040 Form along with all supplementary forms, review all the documentation with a professional accountant to ensure that you have met all requirements.

Completing a 1040 form is a challenging process and seeking expert guidance is important to setting yourself up for success!

Check out these 11 checklists to optimize your accounting processes

Make final adjustments

After reviewing your documentation with a professional accountant, there may well be some missing information or areas that need editing. This is completely normal and part of the process. 

Make those final adjustments so you send off the form with total confidence that you've nailed every section! 

Submit to the IRS

Congratulations!

Give yourself a well-deserved pat on the back.

It's now time to sit back, relax, and await the reward for all your hard work. 

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