How to File Taxes

Filing taxes can feel overwhelming, but it becomes a manageable process with the proper guidance. Whether you’re an individual, a small business owner, or managing corporate taxes, knowing what to expect can save you time, reduce stress, and even maximize your deductions.

At Lumon Tax Services, we specialize in helping individuals and businesses navigate tax season smoothly. From individual tax preparation to business tax preparation, our team of experts ensures accuracy and compliance with tax laws.

Gather Your Documents Before You File

One of the most crucial steps in the tax-filing process is gathering all the necessary documents. Missing even one important form can delay your refund or lead to an audit.

Essential Tax Documents

For employees, your employer should provide a W-2 Formdetailing your earnings and tax withholdings. If you work multiple jobs, ensure you collect a W-2 from each employer.

For freelancers, independent contractors, and gig workers, 1099 forms will report your earnings from clients. If you earned over $600 from a single client, they are required to send you a 1099-NEC. If you earned from multiple sources, gather all relevant 1099s.

For business owners, tax filing requires more extensive documentation. This includes profit and loss statements, expense reports, and payroll records. If you need assistance with small business taxes or corporate taxes, our team is here to help streamline your financial records.

Deduction and Credit Documentation

Tax deductions and credits reduce your taxable income, potentially lowering the amount you owe or increasing your refund. Some of the most common deductions include:

• Mortgage interest payments
• Medical expenses (if they exceed a certain threshold)
• Student loan interest payments
• Charitable donations

For business owners, deductible expenses include office rent, advertising, equipment purchases, and employee salaries. If you're unsure about eligible deductions, a tax consultation with a CPA can help you maximize savings.

Previous Tax Returns

A copy of last year’s tax return can help you quickly reference past deductions and credits. It also ensures consistency in reporting personal and business information.

If you've had IRS disputes or need help addressing back taxes, our tax resolution services can help.

Choosing the Right Filing Status

Selecting the correct filing status is essential because it affects your tax rate, available deductions, and credit eligibility.

Filing Status Options

• Single – For individuals who are not married or legally separated.
• Married Filing Jointly – Most married couples benefit from filing together.
• Married Filing Separately – In some cases, filing separately can be advantageous, such as when one spouse has significant medical expenses.
• Head of Household – Available to single taxpayers who support a dependent (child or elderly parent).
• Qualifying Widow(er) – If your spouse passed away in the last two years and you have a dependent, you may qualify for this status.

Your filing status impacts standard deductions and tax brackets, so selecting the right category is crucial.

If you're uncertain about which status applies to you, CPA services can provide expert advice to ensure you file correctly.

Deciding How to File Your Taxes

Once you've gathered your documents and determined your filing status, the next step is deciding how to file. There are multiple ways to submit your tax return, each with benefits and drawbacks.

DIY Tax Software

Many taxpayers file independently using online tax software. These tools guide you through the process, offering step-by-step instructions. While convenient, they may not catch every deduction or credit, leaving money on the table.

Hiring a Tax Professional

Working with a tax professional ensures accuracy and maximizes deductions. This particularly benefits small business owners, self-employed individuals, and high-income earners. At Lumon Tax Services, we provide comprehensive individual tax preparation and business tax preparation services tailored to your needs.

For those facing IRS challenges, our IRS representation service ensures you have expert guidance in resolving tax disputes.

IRS Free File

If your income falls within a specific threshold, the IRS offers Free File options. This allows you to use tax software for free if you meet the income eligibility requirements.

Paper Filing vs. E-Filing

• E-filing is the fastest and most secure method, ensuring quicker processing and refunds.
• Paper Filing is still an option but takes longer to process, increasing the risk of errors.

Our payroll services ensure compliance and accurate filing of employee withholdings for businesses managing payroll taxes.

Filing your taxes doesn’t have to be stressful. You can ensure a smooth process by organizing your documents, selecting the correct filing status, and choosing the best filing method.

If you need professional assistance, Lumon Tax Services is here to help with everything from tax planning to audit defense.

For personalized tax support, contact us today and let our experts handle your tax filing accurately and efficiently.

Understanding Tax Deductions and Credits

Maximizing your tax deductions and credits can significantly reduce the amount you owe or increase your refund. The key is understanding the difference between the two and knowing which ones apply to your situation.

Tax Deductions vs. Tax Credits

• Deductions reduce your taxable income, which can lower the overall taxes you owe.
• Credits provide a dollar-for-dollar reduction in your tax bill, making them more valuable than deductions.

Common Tax Deductions

Some of the most commonly claimed deductions include:

• Standard Deduction – The IRS provides a fixed deduction amount each year. Most taxpayers take this instead of itemizing.
• Home Mortgage Interest Deduction – If you own a home, you may be able to deduct interest paid on your mortgage.
• Student Loan Interest Deduction – You can deduct up to $2,500 of interest paid on student loans.
• Self-Employed Expenses – Business owners can deduct expenses like office rent, supplies, and travel costs.

For business owners, our business tax preparation service ensures that all eligible deductions are claimed to maximize savings.

Tax Credits That Can Lower Your Tax Bill

Some of the most valuable tax credits include:

• Earned Income Tax Credit (EITC) – Helps low-to-moderate income taxpayers.
• Child Tax Credit – Provides tax relief for parents with dependent children.
• Education Credits – Includes the American Opportunity Credit and the Lifetime Learning Credit for education expenses.

Navigating tax deductions and credits can be complex, but our tax planning services help you optimize your tax strategy to ensure you’re not overpaying.

Filling Out the Correct Tax Forms

Understanding which IRS tax forms you need is essential for filing accurately. While tax software can help, knowing which forms apply to your situation ensures nothing is missed.

Common Tax Forms for Individuals

• Form 1040 – The standard individual tax return used by most taxpayers.
• Schedule A – If you are itemizing deductions, you’ll need this form.
• Schedule C – Required for self-employed individuals to report business income and expenses.
• Schedule SE – Used to calculate self-employment tax.

Tax Forms for Businesses

• Form 1120 – For corporations filing corporate tax returns.
• Form 1065 – Used for partnerships to report business income.
• Form 941 – Employers use this to report payroll taxes.

For business owners, our corporate taxes and small business taxes services help ensure all forms are filed correctly.

If you’re dealing with an IRS audit or need representation, our audit defense and IRS representation services offer expert support.

Calculating Taxes Owed or Refund Due

After filling out the appropriate tax forms, the next step is calculating whether you owe taxes or are due a refund.

How to Determine If You Owe Taxes

Taxes owed depend on several factors, including:

• Total taxable income
• Deductions and credits claimed
• Taxes already paid through payroll withholding or estimated tax payments

If you owe taxes, you’ll need to pay the IRS. Our tax resolution services can help you set up a payment plan or explore options to reduce your tax debt.

How to Check Your Refund Status

If you’re due a refund, you can track it through the IRS “Where’s My Refund?” tool. Most refunds are processed within 21 days if you file electronically.

Submitting Your Tax Return

Once your tax return is complete, it’s time to submit it to the IRS. There are two primary options:

E-Filing vs. Paper Filing

• E-Filing is the fastest, safest, and most convenient way to submit your return. The IRS processes electronic returns much quicker than paper returns.
• Paper Filing takes longer and increases the risk of errors or delays.

If you want to avoid mistakes and ensure compliance, our CPA services can assist with filing your return accurately and efficiently.

Tracking Your Refund or Making a Payment

After submitting your return, you’ll either receive a refund or need to pay the IRS.

How to Track Your Refund

Use the IRS “Where’s My Refund?” tool to check the status of your refund. Your Social Security number, filing status, and exact refund amount are handy.

How to Pay Taxes Owed

If you owe taxes, you can pay through:

• Direct debit from your bank account
• Credit or debit card payments
• IRS payment plans (for large balances)

If you need help negotiating a payment plan or reducing your tax liability, our tax resolution services provide expert guidance.

Common Mistakes to Avoid When Filing Taxes

Filing mistakes can lead to IRS penalties, audits, or delays in receiving your refund. Here are the most common errors to avoid:

• Missing the deadline – Filing late can result in hefty fines and interest charges.
• Incorrect Social Security number – Always double-check your SSN before submitting your return.
• Filing under the wrong status – Choosing the incorrect filing status can impact deductions and credits.
  Forgetting to report all income—All income sources, including freelance and investment earnings, must be reported.
• Overlooking deductions and credits – Many taxpayers miss out on valuable savings by not claiming all eligible deductions.

If you’re unsure about your filing process, a tax consultation with our professionals can help ensure everything is done correctly.

Filing Taxes Made Easy with Lumon Tax Services

Filing taxes can seem overwhelming, but with proper preparation and the right guidance, it doesn’t have to be stressful. By gathering your documents, choosing the correct filing status, understanding deductions and credits, and submitting your return correctly, you can stay compliant while maximizing savings.

At Lumon Tax Services, we offer comprehensive tax solutions for individuals and businesses, including IRS representation, tax planning, and audit defense.

Need expert tax assistance? Contact us today to ensure a smooth and stress-free tax season!