How do I “prepare” my taxes?

If you are an individual living in Massachusetts, you may be wondering how to prepare your taxes for the upcoming filing season. Tax preparation can be a daunting task, especially if you are not familiar with the state and federal tax laws, deductions, credits, and forms. Fortunately, there are some resources and tips that can help you get started and make the process easier.

First of all, you need to determine your filing status and residency status. Your filing status depends on your marital status and whether you have any dependents. Your residency status depends on whether you are a full-year resident, a part-year resident, or a nonresident of Massachusetts. These factors affect how much income you need to report and how much tax you need to pay.

Second, you need to gather all the documents and information that you need to report your income and expenses. These include your W-2 forms, 1099 forms, bank statements, receipts, invoices, and any other records that show your income and deductions. You also need to have your Social Security number, your spouse’s Social Security number if married filing jointly, and your dependents’ Social Security numbers if applicable.

Third, you need to choose a method of filing your taxes. You can either file electronically or by mail. Filing electronically is faster, easier, and more secure than filing by mail. You can use the online MassTaxConnect application to file your taxes for free if you meet certain income and eligibility requirements. You can also use a commercial software program or a professional tax preparer to file your taxes electronically for a fee. Filing by mail requires you to print out the forms and instructions from the Department of Revenue (DOR) website or obtain them from a local library or post office. You then need to fill out the forms by hand, attach any required schedules and supporting documents, and mail them to the appropriate address.

Fourth, you need to calculate your tax liability and pay any balance due or request a refund. You can use the tax tables or the tax rate schedules in the instructions to determine how much tax you owe based on your taxable income. You can also use the online tax calculator on the DOR website to estimate your tax liability. You can reduce your tax liability by claiming any deductions and credits that you are eligible for. Some of the common deductions and credits for Massachusetts taxpayers include:

  • – The personal exemption: This is a fixed amount that you can deduct from your income for yourself and each dependent that you claim. The amount varies depending on your filing status and income level.
  • – The no-tax status: This is a special provision that allows you to pay no state income tax if your income is below a certain threshold. The threshold varies depending on your filing status and number of dependents.
  • – The earned income credit: This is a refundable credit that benefits low- to moderate-income workers who have earned income from wages, salaries, tips, or self-employment. The amount of the credit depends on your income level and number of qualifying children.
  • – The senior circuit breaker credit: This is a refundable credit that benefits elderly homeowners and renters who pay more than 10% of their income in property taxes or rent. The amount of the credit depends on your age, filing status, income level, and property tax or rent payments.

If you have paid more tax than you owe, you can request a refund by entering the amount on the appropriate line of your tax return. If you owe more tax than you have paid, you need to pay the balance by the due date of your return, which is usually April 15th. You can pay online through MassTaxConnect or by mail with a check or money order. You may also qualify for an installment agreement or an offer in compromise if you cannot pay in full.

Finally, you need to keep copies of your tax return and supporting documents for at least three years in case of an audit or inquiry by the DOR or the IRS. You should also check the status of your refund or balance due online through MassTaxConnect or by phone at (617) 887-6367.

Tax preparation for individuals in Massachusetts may seem complicated at first glance, but with some planning and research, you can complete it successfully and accurately. If you need more help or guidance, you can consult the DOR website, call the DOR customer service center at (617) 887-6367 or toll-free at (800) 392-6089, visit a local DOR office, or find a tax professional near you.

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