Individual Tax FAQ

• Last year’s tax return, a photo ID, and Social Security numbers for everyone on the return

• Bank account and routing numbers for direct deposit or payment

• Forms W-2 and all Forms 1099 (1099-NEC, 1099-K, 1099-INT, 1099-DIV, 1099-R, 1099-G and others)

• Form 1098 (mortgage interest), 1098-E (student loan interest), and 1098-T (tuition)

• Form 1095-A if you had Marketplace health insurance

• Records of digital asset (crypto) transactions

• Pay stubs or statements showing tips, overtime, and new-vehicle loan interest for the new deductions

• Receipts for child care, education, charitable gifts and medical expenses

• Business income and expense records, if you are self-employed

The IRS can generally review a return for three years. We recommend keeping returns and supporting documents for at least seven years.

U.S. citizens and resident aliens generally must file if their gross income is at least the standard deduction for their filing status (for 2026: $16,100 single, $32,200 married filing jointly, $24,150 head of household), or if they have net self-employment income of $400 or more. Filing can also make sense below these amounts to claim a refund of withholding or refundable credits. 

• Gifts and inheritances you receive (income they later earn, such as interest or rent, is taxable)

• Life insurance paid because of the insured person’s death (exceptions apply)

• Workers’ compensation benefits

• Damages received for a personal physical injury or physical sickness

• Qualified scholarships used for tuition and required fees

• Foreign earned income, up to the annual limit, if you qualify

• Gain on the sale of your main home, within the limits explained below

Income not excluded by law must be reported on your return. 

• Health Savings Account (HSA) contributions, within the annual limits

• The deductible part of self-employment tax

• Self-employed health insurance premiums for you, your spouse, and dependents

• SEP, SIMPLE, and other self-employed retirement plan contributions

• Traditional IRA contributions (Roth IRA contributions are not deductible)

• Student loan interest, up to $2,500

• Educator expenses, up to $300

• Penalties on early withdrawal of savings

• Alimony paid under a divorce or separation agreement made before 2019

• Moving expenses, for members of the Armed Forces only

Credits reduce your tax dollar for dollar. Nonrefundable credits can reduce your tax to zero; refundable credits can also produce a refund.

• Nonrefundable: Lifetime Learning credit, child and dependent care credit, credit for other dependents, foreign tax credit, saver’s credit, credit for the elderly or disabled

• Refundable or partly refundable: Earned Income Tax Credit, child tax credit, American Opportunity credit, premium tax credit, adoption credit (partly refundable)

Clean vehicle credits ended for vehicles acquired after September 30, 2025, and residential energy credits ended after 2025. The American Opportunity and Lifetime Learning credits cannot be claimed for the same student in the same year.

Your employer withholds tax from each paycheck based on your Form W-4. Claiming credits or deductions in Steps 3 and 4(b) lowers withholding: you take home more now but may owe at filing time. Reporting other jobs or extra withholding in Steps 2 and 4(c) raises withholding and makes a refund more likely. The IRS Tax Withholding Estimator can help you choose. 

Click here to download the W-4 Form 

Click here to watch a video about the W-4 Form 

1. Single: unmarried, divorced, or legally separated on the last day of the year, and not eligible for another status

2. Married filing jointly: married on the last day of the year (including if your spouse died during the year). A nonresident spouse can be included only by election

3. Married filing separately: each spouse reports their own income, deductions, and credits; in community property states, special allocation rules apply

4. Head of household: unmarried (or living apart from your spouse for the last six months of the year), you paid more than half the cost of keeping up a home, and a qualifying person lived with you for more than half the year (a dependent parent does not have to live with you)

5. Qualifying surviving spouse: for the two years after the year your spouse died, if you did not remarry and you have a dependent child living with you. Joint-return tax rates apply

Business expenses must be both ordinary and necessary. An ordinary expense is common and accepted in your trade or business, such as supplies, rent, or wages. A necessary expense is helpful and appropriate for your business, such as professional fees or advertising; it does not have to be indispensable. Personal expenses are not deductible.

• Contribute to your employer’s retirement plan, at least enough to receive any employer match

• If you are self-employed, consider a SEP IRA, SIMPLE IRA, or solo 401(k)

• Contribute to a Health Savings Account if you have a qualifying high-deductible plan

• Interest on state and local bonds is generally exempt from federal income tax, though these bonds usually pay lower rates

You may exclude up to $250,000 of gain ($500,000 on a joint return) if you owned the home and used it as your main home for at least two of the five years before the sale. For the $500,000 exclusion, either spouse can meet the ownership test, but both must meet the use test. If you sold early because of a change in job, health, or other unforeseen circumstances, a partial exclusion may apply. 

You can claim these whether or not you itemize. Income limits and other conditions apply.

• Tips: up to $25,000 of qualified tips, in occupations the IRS lists as customarily receiving tips

• Overtime: the premium part of qualified overtime pay (the “half” in time-and-a-half), up to $12,500, or $25,000 on a joint return

• Car loan interest: up to $10,000 of interest on a loan taken after 2024 for a new personal-use vehicle assembled in the U.S.

• Seniors: an extra $6,000 deduction for each taxpayer age 65 or older