This is a detailed guide to filing your 2023 tax return using Turbo Tax. I have been using it for over eight years.

The deadline for submitting 2023 taxes is April 18, 2024.

• This article is not a general explanation of the U.S. tax system.
• Instead, you will see the step-by-step process of using Turbo Tax.
• You will know some tips on how to save taxes.

⚠️ Disclaimer: This article summarizes the author’s experience. The information provided is for reference only. We are not responsible for errors or omissions and do not promise or guarantee any information’s accuracy, completeness, or usefulness. You should consult a tax professional or the IRS if you have any questions. View the full disclaimer.

Important Dates for U.S. Tax Returns

What taxes do you have to pay?

The taxes you will have to pay include:

• Federal Income Tax: a tax levied by the U.S. federal government based on a system of marginal tax rates based on your tax filing status and income bracket, with higher rates applied to higher incomes.
• Social Security Tax: The tax rate for the Social Security system is 12.4%, with employers and employees each paying half and the self-employed paying the total amount.
• Medicare Tax: For the U.S. health insurance program, employers and employees pay 50/50, and self-employed people pay the total amount.
• State Income Tax: A tax levied by each state in the U.S. Some states, such as Texas, do not levy an income tax.

One of these is the Federal Income Tax. It is a tax levied by the U.S. federal government. In addition to this item, there are two more federal taxes.

The Social Security Tax and the Medicare Tax are the two federal taxes used to fund the Social Security and Medicare programs.

These two taxes are usually deducted from an employee’s paycheck along with the Federal Income Tax, also known as the Federal Insurance Contributions Act (FICA) tax.

If you are self-employed (Self-employed), these two taxes are called ‘self-employment taxes’.

Federal Income Tax

The Federal Income Tax, or Federal Income Tax, is a U.S. federal tax on individual and corporate income used to fund national defense, infrastructure, social welfare programs, and other national expenditures.

The United States utilizes a system of marginal tax rates, with tax rates increasing on a graduated scale as income increases. Specific rates and brackets for individual income tax may vary depending on filing status (e.g., single or married filing jointly).

Social Security Tax

Social Security Tax, in English, is used to fund the U.S. Social Security system, which provides financial support for retirement, disability, and survivors.

The Social Security tax rate for 2023 is 12.4%, of which employees and employers each bear half, or 6.2%.

Social Security taxes only apply up to a specific income limit. You don’t have to pay Social Security taxes on the excess if your total income exceeds that limit (adjusted for inflation).

For 2023, this limit income is $160,200. (For comparison, the limit is $147,000 in 2022).

Medicare Tax

The Medicare Tax, or Medicare Tax in English, is used to fund the U.S. Medicare program, a federal program that provides health insurance coverage to seniors aged 65 and older and certain people with disabilities.

As of 2022, the Medicare tax rate is 2.9%, with employees and employers each paying half, or 1.45%. The Medicare tax has no income cap and applies to all wages and self-employment income.

Note: For self-employed individuals, the Social Security Tax, along with the Medicare Tax, is called the Self-Employment Tax. They pay the full Self-Employment Tax, totaling 15.3% (12.4% + 2.9%) because they are both employers and employees. However, self-employed people can deduct half of the Self-Employment Tax on their tax return, the most tax-deductible, to reduce their tax burden.

State Income Tax

State Income Tax is a tax levied by U.S. states on residents and businesses to support state budgets, including infrastructure, education, healthcare, transportation, and other programs. It is similar to the federal income tax, but rates, deductions, and credits vary from state to state.

It is important to note that not all U.S. states impose a state income tax, and some states use other forms of taxation.

As of 2023, nine states in the U.S. do not have a state income tax, namely:

• Alaska
• Florida
• Nevada
• South Dakota
• Tennessee
• Texas
• Washington
• Wyoming
• New Hampshire: Tax on interest and dividend income only

These states often rely on other sources of tax revenue, such as sales and property taxes, to support the state budget [Source: TurboTax].

Documents Required for U.S. Tax Returns

In addition to the forms above, you may receive other materials related to your tax return, so please consult a tax professional for details.

What are the basic steps in filing a tax return?

1. Calculate your or your family’s Gross Income. If you received a W2 form, you need not calculate your gross income separately. Go directly to the next step. If you are self-employed, your gross income is your net profit (total sales—total expenses). All other income you or your family earns, including investment income, side hustle income, etc., should be included in the gross income calculation.
2. Calculate Adjustable Gross Income (AGI).AGI = Gross Income – AGI Deduction, where AGI Deduction refers to the portion of your income that is not subject to tax, e.g., if you contribute a portion of your income to your retirement account 401K each month, this portion of your income is AGI Deduction; similarly, if you have a Flexible Spending Account (FSA), the portion of your income that goes to the FSA account each month is also AGI Deduction. For example, if you contribute a portion of your income to your 401K each month, that portion of your income is an AGI Deduction; similarly, if you have a Flexible Spending Account (FSA), the income that is deposited into your FSA each month is also an AGI Deduction. Similarly, if you have a Flexible Spending Account (FSA), the monthly income deposited into the FSA is also an AGI deduction. So, after the AGI deduction is removed, the remaining income is called “adjusted income. If you received a W2 form, the first value on the W2 form is your adjusted income and does not need to be calculated separately. If you are a Self-Employed employer, you need to calculate your AGI deduction separately, consisting of your Self-Employed 401K contribution and half of the cost of the Self-Employment Tax.
3. Choose either the Standard Deduction or the Itemized Deduction. The IRS offers two types of deductions: Standard Deduction and Itemized Deduction. For most people, Standard Deduction should be the most cost-effective. For most people, the Standard Deduction should be the most cost-effective. However, suppose you have significant expenses during the tax year, such as medical expenses, a new car, or a new home. In that case, you may be better off with the Itemized Deduction, which requires a calculation comparing the value of the Standard Deduction to the Itemized Deduction.
4. Calculating Taxable Income Taxable Income = AGI – Standard/Itemized Deduction The amount remaining after subtracting tax deductions from adjusted income is taxable. The amount of this income directly determines your tax bill.
5. Calculate your Tentative Tax. Tentative Tax = Taxable Income x Tax Rates.
6. Find all the tax credits that are right for you or your family. A tax credit is a direct tax deduction, which is different from the AGI deductions or standard tax deductions mentioned earlier in that it is a direct deduction from your provisional tax. Common tax credits include the Child Tax Credit, a tax credit of up to $2,000 for each child under 17 in your household.
7. Calculate your Total Tax. Total Tax = Provisional Tax – Tax Allowance.
8. Calculate whether you should have back taxes (Owe Tax to IRS) or a refund (Refund from IRS). At the beginning of each tax year, the IRS locks up a portion of your paycheck in advance (Tax Withheld), which is the tax you pay to the IRS. If the tax you pay in advance is more than the total amount you spend, the IRS gives you back the excess, called a “Tax Refund. Tax Refund”. You must pay additional tax if the tax you paid in advance is less than your total tax liability.

Based on the above, we summarize several important formulas as follows:

If the final calculation is positive, you will receive a refund from the IRS. If it is negative, you will need to pay back taxes.

Note that it’s a good idea to make sure that you pay enough tax upfront each year so that you don’t have to pay back taxes when you file your taxes again, and thus, you won’t have to pay interest penalties.

Below, we describe each of the essential concepts in each equation individually.

What is gross income?

An individual’s or family’s gross income, Gross Income in English, is essentially the sum of the taxpayer’s income from all sources during a tax year.

Gross income includes wages (W2 form), salaries, bonuses, commissions, tips, interest, dividends, pensions, superannuation, rental income, endowment income, etc.

Gross Income is the starting point of the tax filing process and is used to calculate Adjustable Gross Income (AGI) and Taxable Income (TI) to determine taxes.

Total income consists of the following categories of income.

• Employee income such as wages, salaries, bonuses, commissions, tips, etc.
• Interest income (e.g., savings accounts, bonds, etc.)
• Dividend income (e.g., stock dividends)
• Rental income (e.g., from renting out houses)
• Business and self-employment income
• Pensions and social security benefits
• Alimony (for certain divorce settlements before 2019)
• Unpaid labor, prizes, and gambling income
• Some government grants and benefits

Note that if you received a W2 form, the first item in the W2 form, Income (Wages), is not gross income, but rather Adjusted Gross Income (AGI), which is described later, which is the income deposits from the 401K Pension Plan, Health Saving Account, and Flexible Spending Account that have been removed.

For example, in the W2 form below, the $48,500 in the first item is not gross income but adjusted income (AGI). As you can see from item 12 (12a) on the W2 form, Jane put $1,500 into a 401K retirement account. Item 12 (12b) on the W2 form shows Jane’s contributions to health insurance with her employer. Therefore, Jane’s gross income is higher than $48,500.

If you are Self-Employed, your Net Profit (Total Sales – Total Expenses) is your Gross Income.

If you invest in stocks or earn income from your side business, these are part of your gross income.

What is Adjusted Gross Income (AGI)?

Adjusted Gross Income is AGI for short.

AGI is a taxpayer’s gross income after subtracting AGI deductions (i.e., some specific tax-exempt income). It is usually the most important figure in the tax filing process because several other tax items, such as deductible expenses, tax credits, and deductions, are calculated based on this value. The formula for calculating AGI is as follows:

Adjusted Gross Income (AGI) = Gross Income – AGI Deduction

AGI deductions may include:

• If you work for a company, the amount of income you contribute to your 401K retirement account each year
• If you are a self-employed employer and open a Self-Employed 401K, the amount of income you deposit into it each year
• Health Saving Account (HSA) and Flexible Spending Account (FSA) deposits
• Education expenses (student loan interest, education savings accounts)
• Half of the Self-Employment Tax is made up of the Medicare tax, 1.45%, and the Social Security tax, 6.2%.
• Health insurance costs for the self-employed
• Self-employed SEP (Simplified Employee Pension Plan), SIMPLE (Simplified Incentive Matching Plan) and Qualifying Pension Plan deposits
• Traditional IRA (Individual Retirement Account) Deposits
• Alimony (for certain divorce settlements before 2019)
• If you are a teacher, what you spend on the teaching process
• Some costs related to operations or rental income

Note: If you received a W2 form from your employer, the number in the first item on the W2 form is your adjusted income, which has been reduced by the 401K pension deposits, as well as the deposits in your HSA and FSA. As you can see below, the number 48,500 in the first column is Jane’s adjusted income.

Standard or itemized deductions?

Once you have calculated your adjusted income, you need to calculate your “deductions” and decide whether to use Standard or Itemized Deductions.

A portion of your adjusted income that is not taxed is called “Deductions.” Using the deductions, you can calculate Taxable Income.

Taxable Income = Adjusted Income (AGI) – Deductions

There are two tax deductions available, but you can only choose one:

• Standard Deductions: Deductions are pre-determined by the IRS and are the same for families in similar situations. For example, the standard deduction for a married couple filing a joint return is $25,900 (Tax Year 2022), which increases yearly.
• Itemized Deductions: Calculate the amount of tax deductions that can be taken for different spending items, such as mortgage interest, home health care expenses, homeowner’s property taxes, state income taxes, excise taxes, charitable donations, and other expenses, all of which can be used for itemized deduction calculations.

A comparison of the two is shown below:

Standard Deductions

The standard deduction is a fixed amount of relief that taxpayers can deduct directly from their taxable income. The amount depends on the taxpayer’s filing status (e.g., single, married filing jointly, etc.). This type of deduction is simple to administer and does not require a detailed listing of expenses.

You can quickly calculate your taxable income using the standard deductions in the table below.

Taxable Income (TI) = adjusted income (AGI) – standard deduction (SDR)

Here are the standard tax deductions ^[IRS] for 2023:

Note: If your birthday is January 1, 1959, or later, then you will need to file your taxes under the age 65 category.

For example, if you and your wife/husband have an annual gross income of $100,000 (Gross Income), are both under age 65 (standard deduction for 2023 is $27,700) and file a joint return, the amount of income that would be subject to tax is calculated using the following formula.

100,000 (gross income) – 27,700 (standard deduction) = $72,300 (income subject to tax)

This is also known as “Taxable Income”.

Itemized Deductions

Unlike standard deductions, itemized deductions require taxpayers to detail their expenses within a specific range, such as mortgage interest, charitable donations, and medical expenses.

Taxpayers can deduct these itemized expenses from their taxable income. The itemized deductions apply to taxpayers who prove their expenses exceed the standard deductions.

Common expenses that can be used to calculate itemized tax deductions are listed below:

1. Mortgage Interest

If you take out a loan to buy a home, the interest you pay each year can be deducted as part of an itemized tax deduction.

This includes mortgage interest on both the Primary and Secondary Homes. However, this credit is subject to a limit of $750,000 (for married couples filing a joint tax return) on the loan amount that can be used to calculate it.

It’s important to note that if you had an existing $1 million home mortgage debt before December 16, 2017, you can still deduct the interest on that loan.

You can find the Form 1098 sent to you by your lending bank. The first item on the form, [Mortgage interest received from Payers/Borrowers], lists the interest you paid in the tax year.

2. Property Taxes

You can use the property taxes you pay to calculate itemized deductions. Property taxes are based on the value of real estate. You must keep a copy of your property tax bill and proof of payment.

NOTE: The total amount of the house tax, along with the personal property taxes, state and local taxes, and automobile registration fee taxes mentioned below, cannot exceed $10,000 (in 2023), and any excess cannot be used to calculate itemized deductions.

3. Personal Property Taxes

You can use the personal property taxes you pay to calculate your itemized deductions, which are taxes based on the value of your personal property (e.g., cars, boats, RVs, airplanes). You must keep a copy of the property tax bill you receive and proof of payment.

4. Taxes on Car Registration Fee

Not all car registration fees paid can be used in the itemized deduction calculation; only the state taxes are part of it. You will need to keep your car registration fee bill and proof of payment at all times.

It is important to note that not all states charge a fee for car registration fees; for example, a car registered in Texas does not have a state tax line item on its car registration fee bill, so it is not the same as used in the calculation of itemized tax deductions.

Several states below charge taxes on car registration fees. You can identify the state tax portion of your car registration fee bill and use it to calculate your itemized tax deductions.

5. State and Local Income/Sales Taxes

You can choose between state and local income tax and sales tax, and only one can be used to calculate itemized deductions.

However, in some states, like Texas, which doesn’t charge a personal income tax, you can calculate it using sales tax.

Note that if you make a large purchase during the tax year, such as an automobile, airplane, or boat, the sales tax you paid on the purchase can be used in the calculation.

You must keep bills and small checks for purchases during your day.

6. Medical Expenses

You can deduct a percentage of your medical expenses. These expenses include the cost of clinics, hospitals, dentists, etc., as well as health insurance premiums.

It is important to note that only the portion of medical expenses over 7.5% of adjusted gross income (AGI) can be used in the itemized tax deduction calculation.

For example, if your adjusted income is $100,000 and you spend $8,000 on medical expenses, the process you can use to calculate itemized deductions is as follows:

So, you can use $500 to calculate your total itemized deductions.

7. Charitable Donations

Taxpayers can deduct cash and non-cash donations to qualified charitable organizations. Cash donations include donations in the form of checks, credit card payments, etc., and non-cash donations include donations in the form of goods, stock, etc.

The donation credit is subject to certain limitations, usually related to the taxpayer’s adjusted gross income (AGI).

You might consider using isdeductible Online to track and calculate your tax deductions.

• For donations up to $500, you will need a receipt from the donor organization.
• For donations over $500 but less than $5,000, you will need to provide a receipt from the donating organization and a receipt for your original purchase of the item.
• For gifts over $5,000, you will need a receipt from the donor, a receipt from the original purchase, and an appraisal, except for stock.
• If you donate an automobile valued at more than $500, you will need a Form 1098-C from the donating organization.

The IRS also requires the maximum amount that can be donated each year. For 2023, the cap is 60% of adjusted income for cash donations and 30% for non-cash donations. If you donate both cash and non-cash items, the total cap is 50% of adjusted income.

8. Investment Interest Expenses

The investment interest expense deduction is a tax deduction in the United States where the interest on a loan can be used to calculate an itemized deduction. This deduction is designed to encourage investment and to offset some of the costs incurred in borrowing for investment.

Investment interest expense can include interest on loans used to purchase stocks, bonds, mutual funds, or rental property. However, the deduction is limited to net investment income for the year.

To claim the investment interest expense deduction, you must list the deductions on Schedule A of your federal individual income tax return, Form 1040. In addition, you will need to complete and attach Form 4952 (Investment Interest Expense Deduction) to calculate the amount of your investment interest expense deductible.

It is important to note that investment interest expense does not include interest on loans used to purchase tax-exempt securities (such as municipal bonds) or interest on loans used for personal purposes (such as credit card debt). In addition, the deduction does not apply to interest paid on loans used to purchase investments that generate tax-deferred or tax-exempt income, such as retirement accounts or life insurance.

Should I use itemized or standard deductions?

You add up all the expenses that can be used for itemized deductions, and if the value exceeds the Standard Deductions, you use Itemized Deductions; otherwise, you use Standard Deductions.

During the tax filing process, tax preparation software, such as Tubotax, will calculate the tax and automatically inform you of the most suitable tax deductions.

All you have to do is enter your income and expenses into the tax preparation software.

Let’s say, for example, the family has a major purchase, such as a car, or a family member has a large medical expense. At the same time, if you have a home loan, etc., then an itemized tax deduction may be more appropriate for you and your family.

For most families, Standard Deductions may be the best option for greater tax savings. The tax filing process is simpler, with no receipts or proof required.

How is Tentative Tax calculated?

After calculating the adjusted income, you can calculate the provisional tax at a specific rate,…

Tentative Tax = Taxable Income x Tax Rates

Calculations need to be made according to the table below, called “Tax Rates” or “Tax Brackets” [source: IRS, Turbotax].

Note: Not all portions of your Taxable Income are taxed at a fixed rate, but rather, in a graduated manner.

For income within the 10% tax rate, it is calculated at 10%, while the excess is calculated at 12%, and if there is any excess over the 12% tax rate, it is then calculated at the next tax rate, and so on.

For example, following the example above, a family with a gross income of $100,000 (Gross Income), less the standard deduction of $27,700, would pay $72,300 (Taxable Income). Using the Tax Rates table above, you can estimate your federal tax liability:

22,000 x 10% + (72,300-22,000) x 12% = $8236 (provisional tax)

To summarize, $72,300 is within the 12% tax bracket, but not all income is taxed at 12%. The correct calculation is that $22,000 of the income is taxed at 10%, and the excess of $50,300 is taxed at 12%.

Alternatively, you can skip the math and find out how much tax you must pay by reviewing page 11 of the IRS 1040 Completion Guide.

Of course, the specifics are more complicated than that, but the basic truth is this:

You will be taxed on a percentage of your taxable income.

In later chapters, we’ll cover how to complete your tax return using Turbo Tax. This software allows you to set up tax deductions step-by-step, easily, and quickly, as it guides you through the process.

What are the common tax credits?

A tax credit or tax break is a direct deduction from your provisional tax bill. For example, if you receive a $2,000 tax credit, you will pay $2,000 less in taxes.

For example, if you have children (Dependent), you will benefit from the Child Care Credit, which can result in significant tax savings.

1. Child Tax Credit

If you have a child under 17 (as of December 31, 2023), you may be eligible for a tax credit when you file your taxes.

For the 2023 tax year, a $2,000 tax credit is available for each child who qualifies for the tax credit [source: IRS, cfpb].

Check the IRS instructions for conditions you and your children must meet to qualify for tax benefits.

Note: If your annual income exceeds $200,000 for an individual or $400,000 for a family, you are not eligible for this tax deduction.

Continuing the example above, the federal tax required before child tax benefits are considered is $8,236.

If you have two children in your household, the federal tax to be paid is calculated according to the formula below:

8,236 (provisional tax) – 2,000 x 2 (tax allowance for two children) = $4,236

Therefore, the Child Tax Credit amount is subtracted directly from the Tentative Tax.

2. Tax credit for childcare expenses (Dependent Care Credit)

This tax benefit is for money spent on childcare and hobby classes for children under 13.

Your family must meet certain conditions to qualify for the Dependent Care Tax Credit.

The specific tax deductions are as follows [Source: TurboTax]:

• For a family with one child, the most you can count on for childcare is $3,000, with tax credits ranging from 20% to 35%;
• For families with two or more children, the most you can count on for childcare is $6,000, with tax credits ranging from 20% to 35%;

The specific calculations are as follows:

As you can see from the table above, exactly which of the 20% to 35% ratios to use in your calculations depends on your gross income:

• If income is less than $1,5000, then the rate is 35%;
• For every $2,000 increase in income, the rate decreases by 1%;
• When income exceeds $43,00, the calculated rate drops to a minimum of 20%;

Continuing with the previous example, the total tax after considering the Child Tax Break is $4,236.

If you have two children and spend $5,000 on childcare, you get 20% of that $5,000 as a tax credit.

In this way, your final tax is calculated according to the formula below:

4,236 – 5,000 x 20% (childcare tax credit) = $3,236

Many programs are suitable for Dependent Care Tax Credit, such as:

• Kindergartens, preschools;
• After School Classes;
• Summer camps, but overnight Camps don’t count;

Related reading: The principal deposited into a traditional IRA account each year is not taxable that year (restrictions apply).

3. Adoption Credit for Adopted Children

If you adopted a child during the tax year or are in the process of adopting a child, you may be eligible for the Adopted Child Tax Credit.

For 2023, the maximum deduction is $15,950, but this tax deduction is subject to the family’s adjusted income [IRS].

• You are not eligible for this tax credit if your adjusted income exceeds $279,230 (in 2023).
• If your adjusted income is less than $239.230 (in 2023), you can take full advantage of this tax break.
• You can get a partial tax deduction if your adjusted income is between the two.

4. Energy-Efficient Vehicles (EEV) Tax Credit

Taxpayers who purchase new energy vehicles (such as electric or plug-in hybrid vehicles) that meet fuel efficiency requirements may be eligible for a federal tax credit. The amount of the credit depends on the type and performance of the vehicle.

To claim this credit, refer to the original purchase record of the vehicle purchased. The automobile manufacturer or national dealer can tell you the amount of credit allowed for the particular make, model, and year of purchase.

Fuel-efficient vehicles must meet the following conditions:

• Use of the car in the current year
• Only specified models and years are eligible
• Use of vehicles primarily within the United States
• You are the original owner of the vehicle, and used vehicles do not qualify

Suppose you buy a plug-in electric drive vehicle, often called a plug-in hybrid electric vehicle (PHEV) or electric vehicle (EV). In that case, you may qualify for the Plug-in Electric Drive Motor Vehicle Credit (PEDV). ).

5. Energy-Efficient Vehicle Charging Station (EEVCS) Tax Credit

Taxpayers who install home charging stations for charging electric vehicles can receive a percentage tax relief credit. This credit is designed to encourage green travel and sustainable energy use.

Charging stations for plug-in or hybrid electric vehicles are eligible for this credit. To qualify for this credit, the following conditions must also be met:

• You start using the station in 2022
• You are the original owner of the station
• The station is primarily used within the United States
• The station is installed at your primary residence

6. Home Energy Credit

Taxpayers may be eligible for tax credits for installing renewable energy equipment such as solar, wind, or geothermal. Improvements that increase a home’s energy efficiency (e.g., replacing energy-efficient windows, insulation, etc.) may also qualify for the credit.

When you install new energy equipment, you must check the Manufacturer’s Tax Credit Certification Statement to determine if it qualifies for this tax credit.

The main energy programs included in this tax credit include:

• Solar water heating
• Solar electricity
• Fuel cell property
• Small wind energy property
• Geothermal heat pump property

The tax credit is approximately 30% of the cost you spend on installing renewable energy, and the cost is calculated to include labor costs.

A few common tax filing scenarios

• International students: Scholarships (TA/RA), car, no housing;
• Dual-income couple: house, car, small children, savings;
• One spouse works, and the other is self-employed (LLC/contractor): has a house, car, children in college, savings, and stock investments;

Selecting tax preparation software

We use Turbo Tax to complete our online tax filing and submit it online.

You may need different software for different types of income and different items you need to file taxes.

• Free Version: This free version is for those who need to complete a W-2 tax return. It is also needed if you or your entire family works for a corporation and only has a W-2 form.

• Deluxe version: This is for those who have already purchased a home and are still paying in installments. This version gives you more tax deduction options, such as home loan and donation tax credits;

• Premier version: For those who have stocks, bonds, share subscription plans, and other investments, as well as for those who have rental income from their homes and buy and sell bitcoins;

• Self-Employer version: This version is for those who run their own company or work as contractors. It seamlessly connects with QuickBooks to make tax filing faster for individual business people.

Regardless of which version you plan to use, you can start by going to Turbo Tax’s front page and signing up for a free account to begin filing your taxes.

The software will remind you which version you should use when you need any paid option.

U.S. Tax Return Steps

• Step 1: Create a Turbo Tax Account
• Step 2: Fill in personal and family details
• Step 3: Filing Federal Taxes (Income and Expenses, Tax Deductions and Tax Credits)
• Step 4: Fill out your state taxes
• Step 5: Review and File Tax Forms Online

Step 1: Create a Turbo Tax Account

• Log in to the Turbo Tax homepage and click the button [sign up] in the upper right corner to register for an account.

• Choose whether or not to share personal information with Intuit Inc.

Since filing your tax return requires you to fill out a lot of personal information, such as SSN, W-2, etc.

IRS REQUIREMENT: Turbo Tax cannot share this information with any organization or individual without your consent.

The following page asks if you would like to share personal information with Turbo Tax’s parent company, Intuit Inc.

You can fill it out according to your personal needs. Here, we choose [No Thanks].

• Enter personal information

• Choose whether to use last year’s tax form

If you have last year’s tax return (PDF), it will save you a lot of time entering the information. Please click [Let’s do it];

You can also re-enter your information by clicking [I’ll type my info]. Here we choose this option.

• Enter your personal or family tax situation

Ask if you are single or married. Please fill in the form as appropriate:

Please select the income and expense program that applies to your family’s situation:

Here, we choose a few commonly used programs such as W-2, Childcare expense, 1099-INT, etc. Then click OK:

Step 2: Fill in personal and family information

• In the case of a couple, [Filing a joint return] is recommended.
• Fill in personal information about you and your wife/husband: include name, date of birth, SSN, job title;
• The state in which your family lives (used to determine which state’s state taxes to submit);
• Finally, the child’s personal information, including name, SSN, citizenship status, and length of time living with the parents, must be filled out.

You will need to indicate how long the child has lived with you and how long he or she has been in the U.S. This length of time determines whether or not you are eligible for the Child Tax Credit.

Qualifying children will give you Child Tax Credits:

After that, the software system will ask you if you are earning income in a state other than where you live, and you will need to answer:

• Whether there is income from work in other states;
• Whether you own a business, farm, or rent in another state,
• Whether or not you are selling a house in another state
• Whether you have gambling income in other states (e.g., gambling winnings in Las Vegas)

Depending on the family status and income sources you fill in, the Turbo Tax system will recommend one of the following tax filing options to you:

• Single Individual Tax Return (Single)
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Death of a spouse (Widow/Widower)

Then, based on my family’s situation, Turbo Tax recommended that I take a married couple’s joint tax return.

After you have filled out all the information about your family members, you can review what you have filled out. Please make sure it is correct.

Here’s how to start filling out your federal taxes.

Step 3: Fill out your federal taxes

When filing your federal tax return, you will need to fill out three major fields:

• Income & Expenses;
• Deductions & Credits;
• Other tax situations;
• Federal Tax Review;

Joint tax return: Income & Expenses

Depending on you and your family’s income, you may need some of the following to start filling out the application:

• W-2
• 1099-INT
• Other 1099 forms
• 1099-DIV: The company sends you dividends.
• 1099-B: Gains from buying and selling stocks, trusts, bonds, real estate, coins, stamps, art, etc.
• 1099-R: Income from inside a pension such as a Pension Plan, Annuity, or IRA.
• Bank accounts or assets outside the U.S.

For example, when completing the W-2 form, there are several important items on the form:

• Item 1: Income subject to federal tax;
• Item 2: Federal Tax Withholding;
• Item 3: Income subject to social security contributions;
• Item 4: Social Security withholding;
• Item 5: Income subject to Medicare;
• Item 6: Medicare Withholding;

Throughout the tax filing process, Turbo Tax prompts you to follow the steps to fill in the itemized information on your Form W-2.

After completing the W-2 form, you will need to fill out all the other income categories in order, for example:

• If your bank deposits have interest, then a Form 1099-INT is required.
• If you have your own LLC or if you are a Contractor, you can report your Income and Expense as shown below:

Net Profit = Income – Expense

• For income over $600, you should receive a 1099 form from the payer, and for all other income less than $600, you will need to file each one.
• The expenses section includes all the money you spend on these jobs. You must keep a detailed record of each expense and enter it in the expenses section of Turbo Tax.

In the chart below, you can add all income categories except W-2, Self-Employment income and expenses, and 1099-INT by clicking [Add more incomes].

Finally, you have the opportunity to Run Your Audit Assessment.

If what you file makes sense, you will less likely receive an Audit from the IRS.

This completes the income and expenses for federal tax purposes.

Here’s a look at tax deductions and tax credits in federal taxes.

Federal Tax: Deductions and Credits

There are two main things to look for in this step:

• What portion of income is not taxed (Standard Deduction or Itemized Deduction?);
• What tax credits are available? For example, if you have children under the age of 17, you can get a child tax credit called the Child Tax Credit.

Tax reduction approach:

As we have described at the beginning of the article, there are two types of tax breaks available:

• Standard Deduction
• Itemized Deduction

Depending on the family’s different income situations, the tax preparation software will recommend the most suitable tax deductions for you.

You may need the following materials for calculating the amount of Itemized Deductions:

• Form 1098: Interest on Home Loan Payments;
• HSA Accounts: health care accounts;
• 1098-E: Student loan for child’s college education;
• IRA or Roth IRA Account: retirement plan account;
• Medical expenses for family members;
• Records of housing property tax payments;
• Car registration fees;
• Excise tax on purchases;
• Records of donations to charitable organizations;

With Turbo Tax, the system will recommend what type of relief you can expect. The standard relief method is relatively simple to use and suited to most people.

Tax relief

We covered two types of tax relief at the beginning of the article:

• Child Tax Credit;
• Childcare Tax Credit;

Regarding the Child Tax Credit, every child who meets the criteria will receive a $2,000 tax credit, which is $2,000 directly subtracted from the amount of tax you should be paying.

With the Childcare Tax Credit, you can get a tax deduction of 20% to 35% of the cost of childcare, not to exceed $3,000 for one child or $6,000 for two or more children.

After you fill out all your deductions and tax credits, Turbo Tax will automatically calculate the amount of Itemized Deductions for you and compare it to the amount of Standard Deductions for the current year, ultimately determining which deduction you should use.

Turbo Tax’s proposed tax deduction for our family is Standard Deduction.

Federal taxes: other tax situations

In this step, Turbo Tax will check for you to see if you have any other tax situations that need to be filed or if you have any special filing requirements.

These are some of the uncommon tax filing scenarios that are given by tax preparation software:

If you have some special requirements, for example, the

• You want to file an extension;
• You will need to inform the IRS that you have just changed your address;

You can affirm them all here.

For most people, this section can be skipped, and you can go straight to the Federal Review.

Federal taxes: review

Turbo Tax will be reviewing your federal tax return for:

• Whether the contents of the tax return are correct;
• Is there any information missing;
• Recheck the current tax return amount.

If your tax return is reasonable, then you will be provided with the following confirmation information:

At the same time, you can find out the amount of your tax return for the year or how much tax you still have to pay:

Step 4: Filing State Taxes

The process of filing state taxes is similar to filing federal taxes, but the process is more straightforward.

There are seven states in the U.S. that do not require you to file a state tax return (source: Turbo Tax ) if you live in one of these states:

• Texas
• Alaska
• Florida
• Nevada
• South Dakota
• Washington
• Wyoming

In addition, New Hampshire and Tennessee tax only interest rate income and dividend income, but not other income, such as wages.

If your residence is not one of the seven states listed above, you must file a state tax return.

Using California as an example here, once you select your state, Turbo Tax will automatically transfer all the information you previously filled out about your federal taxes to the state tax filing:

After that, Turbo Tax will ask about your and your family’s residency in your state:

After that, you must follow Turbo Tax’s prompts and answer all the questions.

The software will prompt you with all the updates you need to make. For example, California handles home loan rates differently:

In the meantime, you need to check out the California tax credits again:

Finally, the tax filing software will help you check all the information you have filled out for your state tax return:

Click [Let’s check it over] to start reviewing. If you make any mistakes or have incomplete information while filling out the form, the software will prompt you immediately:

Step 5: Review and submit online

After you have completed your federal and state taxes, the tax preparation software will again review your tax return for completeness and reasonableness.

Click the [Check my info] button to review your tax return.

If there are no problems, you will get the following message: Ready to File

You will also need to complete the following three steps before the final File:

• Reconfirm your purchase of Turbo Tax software;
• Choose the method of reporting your tax forms to the IRS and your state;
• Select the tax form that requires File;

Once you have filled out your tax return information, it’s time for Step 3: Starting your tax return. You will need to fill out your driver’s license or identification information and double-check that the information you have filled out is accurate.

Next, you can mail your tax form or submit it online (E-File). We use E-file every year. It’s easy and convenient, and the refund is fast.

Finally, click on the button [Transmit my return now] to complete the final tax return process. Please note: When you click on the button, the tax return process is complete, which means that you have delivered the tax form to your mailbox and there is no way to re-fill it.

Congratulations on completing these three steps, and you’re done filing your taxes!

Some thoughts on tax savings

Based on the formula for calculating the tax payable:

Regarding provincial taxes, you may refer to:

1. Increase AGI deductions, for example, by using a Flexible Spending Account and Child Spending Account, and if you are a self-employed employer, consider opening a Self-employed 401K. income deposited into these accounts is an AGI deduction.
2. Increase Deduction: While the Standard Deduction is appropriate for most people, if you or your family has a large purchase or medical bill in the tax year, consider whether the Itemized Deduction is more appropriate.
3. Make full use of tax credits.

References

• Internal Revenue Service
• 1040 Completion Guide
• Turbo Tax
• Comparison of U.S. tax preparation software: How to choose TurboTax, TaxAct?

FAQ

More Guides

• TradeUP 开户奖励：最高 5 次免费股票抽奖
• 19 best job search sites in the U.S. [2024] Bonus: Job Search Tips
• How to File Your Tax Return for Tax Year 2023 Online [2024 Update]
• 美国的共同财产制：美国夫妻财产制度有哪些？
• 什么是社会保障税和医疗保险税？Social Security Tax & Medicare Tax
• 美国驾照直接换中国驾照？仅笔试、无驾考、仅一天
• 美国保健品如何选? Nature Made vs Nature’s Bounty
• 2026 美国保健品推荐 · 保健品品牌 + 功效全攻略
• 美国防毒面罩 + 防护服推荐
• 如何选购孕期化妆品？除了日日的Fenty，还有哪些值得推荐？
• 如何选购孕期护肤品？ 孕期要美、护肤要对
• 什么是 Web3【2026】11个与生活相关的革新技术
• I-94是什么？如何打印I-94表格？出入境记录卡解析
• 美国家具从哪里买【2026】各家具店有什么特点？
• 什么是全球入境计划【Global Entry】详细步骤图解
• 富途牛牛怎么样？富途牛牛与富途moomoo有啥区别
• Chase IHG Rewards Club Traveler 信用卡详解
• Chase IHG Rewards Club Premier 信用卡详解
• Citi Double Cash 信用卡详解【最新测评】
• Citi Premier 信用卡详解【最新测评】