Whether you have to file
You must file a federal return once your income passes a threshold tied to the standard deduction, which the IRS adjusts every year and publishes in the instructions for Form 1040. Two exceptions matter. If you had net self-employment income of $400 or more, you must file regardless of your total. If you earned less than the threshold but had tax withheld from your paychecks, you are not required to file but should, because filing is the only way to get that money back. Settle one thing with your parents before you start. If they can claim you as a dependent, your return must say so, and two returns that disagree will both be delayed.
What arrives and when
Employers must send the W-2 by the end of January. Banks and brokerages send 1099 forms for interest and investment income, and clients send a 1099-NEC for freelance work. A 1098-T reports tuition paid, a 1098-E reports student loan interest, and a 1095-A arrives if you bought health insurance through the marketplace. Wait until everything is in hand, because amending a return is a bigger nuisance than waiting two weeks. The IRS receives copies of all of them, so omitted income gets noticed.
Choosing how to file
- IRS Free File offers free guided software from partner companies if your income is under an annual limit, which is listed on the IRS website.
- Free File Fillable Forms are electronic versions of the paper forms, with no income limit and no guidance.
- The Volunteer Income Tax Assistance program provides free in-person preparation by IRS-certified volunteers for people with modest incomes.
- Commercial software is fine, though it steers you toward paid versions that a simple return does not need.
File electronically with direct deposit, and a refund usually arrives within three weeks. To sign an electronic return you are asked for last year's adjusted gross income, and a first-time filer enters zero. Most states with an income tax require their own return.
If you owe
The deadline falls in mid-April, and the exact date is on the IRS website. An extension gives you six more months to file but no extra time to pay. If you cannot pay in full, file on time anyway, because the penalty for failing to file runs about ten times the penalty for failing to pay, and the IRS sets up monthly payment plans online.
Note Keep a copy of every return and its supporting forms for at least three years, the normal window in which the IRS can question it.
