How to file your taxes

Filing taxes is a daunting experience for many Americans, whether it's their first time or they've been doing it for decades.

The digital age has made it a lot easier to download your tax documents from your employer and financial institutions rather than wait for them to come in the mail.

But there's still a lot of complexity to the process, even if you're filing a simple return.

Here's what you need to know to file your tax return.

Before you start filing, collect your tax forms so you aren't scrambling once you start the process. A comprehensive list of documents you'll need is available from the IRS, but here are the most pertinent ones:

• Your Social Security Number or tax ID number
• Any employment and/or investment income documents, such as a W2 or 1099
• Forms for deductions such as mortgage interest, student loan interest, charitable donations or education costs
• A copy of your 2023 federal tax return
• Your IRS Identity Protection PIN, if applicable
• Your bank routing and account number to for direct deposit of any refund

If you're married and filing a joint return, you'll also need your spouse's information.

If you have children, parents or other people you support, you'll need details about them, including their names, dates of birth and Social Security or Tax ID numbers. You'll also need any income information about anyone in your household.

There are a variety of income documents. The ones you need depend on how you earn a living.

Form W-2

Also known as a Wage and Tax Statement, a W-2 is the most common income document. It should be provided by your employer by the end of January and indicate your income in the year prior and the amount of taxes that were withheld from your paycheck.  

Form 1099

Form 1099s are for income that doesn't come from a primary full-time employer. There are many variations.

• 1099-K:Income from third-party apps and online marketplaces 
• 1099-NEC: For other contract work
• Form 1099-G: For unemployment compensation
• 1099-R: Pension, annuities, IRA
• 1099-INT: interest income
• 1099-DIV: investment dividends
• 1099-B: Income from stock sales
• 1000-G: Government payments
• 1099-MISC: Miscellaneous income 

Other forms

• Form W-2G: All gambling winnings need to be reported to the IRS. If you earned at least $600, you should receive this from the casino or gambling platform.
• Form 1040 (Schedule E): For rental income
• SSA-1099: Reports any Social Security benefits you received in the previous year.

The IRS accepts too many types of credits and deductions to list fully, but these are among the most common:

• Form 1098 for deducting mortgage interest payments
• Form 1098-E for student loan interest deductions
• Form 1098-T for tuition and education costs
• Form 5498 for individual retirement account deposits
• Form 5498-SA for health savings account contributions

If you itemize rather than take the standard deduction, you can claim charitable donations, medical expenses, local income tax, childcare, financial losses and more.

For tax year 2024, the standard deduction is $14,600 for individual filers and married people filing separately, $29,200 for joint filers and $21,900 for heads of household. If your total deductions and credits are below this threshold, it may not make sense to itemize.

If you do itemize, you'll need IRS Form 1040 and attach Schedule A.

Your filing status determines your filing requirements, the standard deduction you can claim and your eligibility for certain tax credits.

Single: You are unmarried, divorced or legally separated as of December 31 and don't have a dependent or other person who qualifies you for any other filing status.

Married filing jointly: You are married and able to file a joint return with your spouse or your spouse died during the tax year and you did not remarry.

Married filing separately: You are married but have chosen to file separate returns.

Head of household: You are an unmarried individual who is not claimed on someone else's return and who pays for over half of the care of at least one dependent.

Surviving spouse: Your spouse died during the previous tax year. To claim this status you must file a joint tax return before their death and have at least one dependent child.

There are seven tax rates for 2024, ranging from 10% to 37%. The maximum rate only applies to individual filers earning over $609,350 and married couples filing jointly who made a combined total of at least $731,200.

Because our tax code is progressive, few people fall into a single tax bracket. If you're an individual filer who earned $45,000 in taxable income in 2024, for example, the amount you owe will be broken into two tax brackets:

• 10% for the first $11,600
• 12% for any income between $11,601 and $47,150

If you earn $45,000 in 2025, however, the breakdown could look somewhat different.

• 10% for the first $11,925
• 12% for income between $11,926 and $48,475

1. Filing manually

You can print out the relevant forms from the IRS website and mail them in before April 15. If you have wages, file Form 1040, U.S. Individual Income Tax Return. If you have a business or side income, include Form 1040 with a Schedule C and If you're a senior, you can file 1040-SR.

A paper return will take longer to process, however, which could delay any refund you're owed by several weeks.

2. Using an online tax preparation service

One way to make filing easier is to use one of CNBC Select's top online tax prep programs. Depending on the complexity of your return, you may qualify for a free tier.

TurboTax offers a variety of plans, whether you're a DIYer, need real-time help or want to pass the whole thing to an independent tax professional. The company claims that 37% of customers qualify for its free edition, which is available to those with W-2 income, qualified retirement distributions and limited 1099 interest and dividends.

If you have unemployment income, stock sales, income from rental properties or self-employment income, however, you'll need to choose a paid plan.

H&R Block prides itself on its easy-to-use interface and 100% accuracy and biggest-refund guarantees. Support from AI Tax Assist, online chat and Worry-Free Audit Support are available with all paid tiers, or you can visit one of more than 11,000 branches nationwide.

Cash App Taxes is a standout for offering free federal and state filing that includes nearly every IRS form and schedule.

3. Filing for free with IRS Direct File

In 2023, the IRS launched Direct File, a free way to file a federal tax return online. Currently, the program is open to qualified taxpayers in 25 states.

To be eligible, you must be a W-2 employee, receive Social Security or unemployment insurance or have investment income of less than $1,500. You must also have a Social Security number or Individual Taxpayer Identification Number and a valid state ID or passport.

You can use Direct File to claim the Earned Income Tax Credit and Child Tax Credit, but not other credits.

The program doesn't allow you to itemize deductions or report additional income, like money from gig work or rental properties.

Another way to file a federal return at no cost is with IRS Free File, which is available to taxpayers whose adjusted gross income was less than $84,000 in 2024.

4. Hiring a tax professional

If you want to hire a tax pro, you should vet them carefully. Check reviews on Yelp and Google Reviews and confirm the status of their certification by searching their name or practice on your state's CPA registry.

Hiring a CPA will cost more than most online tax-prep programs but having a professional give you their individual attention means there's much less risk of mistakes and a greater possibility of getting a larger refund.

According to the National Society of Accountants, a 1040 tax filing with no itemizations averages about $220. (If you itemize, that goes up to about $400.)

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every tax article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of taxWhile CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.