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Tax Basics


Quite a bit, actually:

  • Work tools and equipment
  • Electronics such as cell phones, tablets and computers, if they're used for work
  • Union and trade association dues
  • Subscriptions to work-related professional journals and other publications
  • Job search expenses (if you’re seeking within your current profession)
  • Education costs to maintain or improve current skills

Preparing your tax return will be easier if the tax documents you need are organized and readily available:

  • Social Security or other taxpayer ID numbers for you, your spouse, and dependents
  • Birth dates for you, your spouse, and dependents
  • Income statements: Forms W-2, W-2G, 1099-R, etc.
  • Interest and dividends statements from banks, brokerages, etc.
  • Form 1098 from your mortgage lender
  • A copy of last year's tax return
  • Bank routing and account numbers
  • The amount you paid for childcare and the childcare provider's tax identification number
  • Receipts for charitable donations

Individual tax returns are filed using one of three variations of the IRS's Form 1040. Which form you should use depends on your tax situation. It's important to file the correct form to ensure that your return is processed quickly. To simplify this process, the appropriate form will be automatically selected for you after you enter your information.


Form 1040EZ

Form 1040EZ is the simplified tax form. It is for the simplest tax returns. You can file Form 1040EZ if:

  • Your filing status is single or married filing jointly.
  • You are not claiming any dependents.
  • You are not claiming any adjustments to gross income.
  • You are not claiming any credits other than the Earned Income Credit.
  • You, and your spouse if married, were under age 65 and not blind.
  • Your taxable income is less than $100,000.
  • You do not owe any household employment taxes on wages paid to household employees.
  • You didn't declare a Chapter 11 bankruptcy case after Oct. 16, 2005.
  • Advance payments of the Premium Tax Credit were not made for you, your spouse, or any individual enrolled in coverage for whom no one else is claiming the personal exemption.
  • Your income is only from: Wages, salaries and tips; Unemployment compensation; Taxable scholarships and fellowship grants; No more than $1,500 in interest income; Alaska Permanent Fund dividends.

Form 1040A

You can file Form 1040A if:

  • Your income is only from: Wages, salaries, tips, Interest and ordinary dividends; Capital gain distributions; Taxable scholarship and fellowship grants; Pensions, annuities and IRAs; Unemployment compensation; Taxable Social Security and railroad retirement benefits; Alaska Permanent Fund dividends.
  • Your adjustments to income are only from: Educator expenses; IRA deduction; Student loan interest deduction; Tuition and fees deduction
  • You do not itemize deductions.
  • Your taxable income is less than $100,000.
  • You did not have an alternative minimum tax adjustment on stock acquired from the exercise of an incentive stock option.
  • The only tax credits you claim are: Child and Dependent Care Credit; Elderly or Disabled Credit; Child Tax Credits; Education credits; Retirement Savings Contribution Credit; Earned Income Credit; Adoption Credit.

Form 1040

If you do not qualify to file Form 1040EZ or Form 1040A, you will file the third, Form 1040. All types of income, credits, deductions, and taxes can be reported on this form. You must use Form 1040 for any of the following:

  • You have self-employment or farm income.
  • You received $20 or more in unreported tips in any one month.
  • You received income from a partnership, an S corporation, or an estate or trust.
  • You received dividends on insurance policies if they exceed the total of the premiums you paid.
  • Your taxable income is $100,000 or more.
  • You itemize deductions.
  • Your Form W-2, box 12, shows uncollected tax on tips or group term life insurance.
  • Your Form W-2, box 12, shows a code Z.
  • You owe excise tax on insider stock compensation from an expatriated corporation.
  • You declared a Chapter 11 bankruptcy case after October 16, 2005.
  • You have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option.
  • You owe household employment taxes.
  • You are claiming the adoption credit or received adoption benefits from an employer.
  • You are eligible for the Health Coverage Tax Credit.
  • You are an employee and your employer did not withhold Social Security and Medicare tax.
  • You had a qualified health savings account funding distribution from your IRA.
  • You had a loss from to a federally declared disaster.

Need more time to file your income tax return? You can get an automatic six-month extension of time to file from the IRS if you can’t make the April 15 tax deadline. Here are some points to remember about extensions:

It’s Simple and Quick Online

To file an extension, SIGN UP NOW or SIGN IN HERE to your account and click the “Get a Federal Extension” button on the main page of your return. For the extension, you'll need to fill out the Name & Address screen, then select whether you expect a refund or you expect to owe tax. (If you don't know, we can help you decide whether you need to include a payment.) If you want to include a tax payment, you'll have the option of paying from your bank account or credit card, or you may choose to mail a check.

When you're through making your selections, you’re ready to e-file the extension. That will give you until October 15 to file your return.

Extra Time to File, Not Extra Time to Pay

An extension will give you extra time to get your return to the IRS, but it won’t extend the amount of time to pay any tax due. Any tax due has to be sent to the IRS by April 15; after that, interest and penalties will accrue.

If your return is done, but you can’t pay the full amount of tax due, you do not need an extension. We recommend that you file on time and pay as much as you can with your return. The IRS will send you a bill or a notice for the balance due (which will include penalties and interest).

You may qualify for an installment payment plan. You can even apply online. Please note that if you pay your taxes in installments, penalties and interest will continue to accrue.


Due to advancements in technology, not only do you have the benefit of e-filing your returns, but you also have modern innovations like the cloud to help stay organized.

Making Tech Work for You

You no longer have to wait until we got our W-2 in the mail. Many employers now email a link to an electronic W-2, which you can simply download the document and print it for your records, copy it to your electronic storage, or save to the cloud.

This same procedure is also being used for a number of financial reporting forms that used to arrive in the mail. Everything from investment interest statements to student loan reporting is available electronically. Check with your financial institution, broker, or education institution, because electronic availability is not quite universal just yet. But it is common and growing.

If you decide to go the digital route for your tax document storage, it’s good to go all digital. That is, it’s best not to have some paper documents and some digital. Why? Because the conditions of storage are different for each type of storage medium. Paper forms, for example, degrade badly over time; rough treatment can make them unreadable; and your physical storage has to be big enough to handle the papers you’re storing.

Our recommendation is to go completely digital. While many of your current documents are available electronically, there are probably a significant number of documents that you have on paper. Scan them and create either PDF (Portable Document Format) or JPEG images. Scanners have become very affordable and easy to use. Just about any retail store that offers electronic or computer items should carry them.

As you scan you can create folders on your hard drive for the various categories you might need: Income, Deductions, Medical and so on. That will speed up finding the right documents later.

Back Up and Encrypt!

There are a couple of basic rules for keeping your personal financial records safe and accessible. One is to keep more than one copy of important documents or records. Second, make sure at least one of those copies is kept somewhere besides your home or business. This is called “off-site storage,” and it’s been a basic tenet of sound recordkeeping for years.

Resist the temptation to simply keep your electronic records only on your computer hard drive. Granted, there’s a good chance it will be there the next time you do your taxes, but hard drives fail, usually at the worst possible times. You need more durable storage – and in another place.

In addition to your computer hard drive, consider burning a CD with your scanned and saved documents, or copying them to a flash drive. If a flash drive is your option, we recommend that you don’t use the drive for anything else other than your financial documents. Once you’ve transferred your files, you can store the CD or drive at your home. But better is to store the backup off-site – in a safe deposit box, if you have one.

If you have access to a cloud storage environment, that’s even better. For those unfamiliar with it, cloud storage refers to internet-based storage environments, where you upload your files to a provider’s servers. You may see your files just as another drive on your computer, or you may have to sign on to the provider’s website to access them. Both Apple and Microsoft offer cloud storage, as do companies like Dropbox.com and Box.com. Rates and storage vault sizes vary.

Since cloud providers back up their data frequently, you get off-site storage and backup that are safe and reliable. And that’s just about as good as it gets.

Most importantly, to make sure your data is secure, you can use various tools to make sure your data is encrypted when it goes to the cloud or on your local storage.

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