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Filing taxes in the United States is a crucial responsibility for many residents, with specific requirements about who must file and what types of income are taxable. Thankfully, tax filing apps have simplified the process, making it easier for individuals to understand their obligations and submit their returns accurately. This guide explores the key aspects of U.S. tax obligations, identifies who needs to file, what income is taxable, and recommends the best apps to streamline your tax filing experience.
The requirement to file taxes depends on several factors, including income level, filing status, age, and residency status. Below are the main groups who typically need to file a tax return:
U.S. Citizens and Resident Aliens: Individuals who meet specific income thresholds based on their filing status (single, married filing jointly, etc.). Age also affects thresholds—for example, higher thresholds apply to individuals over 65.
Non-Resident Aliens: Required to file if they earned U.S.-sourced income or were engaged in a U.S. trade or business.
Self-Employed Individuals: Must file if they earned $400 or more in net self-employment income.
Dependents: Dependents with unearned income (e.g., investment income) above $1,250 or total earned income over $13,850 (for 2025) must file.
Individuals Claiming Certain Tax Credits: If eligible for credits like the Earned Income Tax Credit (EITC) or the Child Tax Credit, filing is necessary to claim them, even with low or no income.
The IRS requires individuals to report and potentially pay taxes on the following types of income:
Wages and Salaries: Income from a job reported on Form W-2 by employers.
Self-Employment Income: Includes freelance or contractor earnings reported on Form 1099-NEC or Form 1099-K.
Business Income: Income from owning and operating a business.
Investment Income: Includes dividends, interest, and capital gains from the sale of assets like stocks or real estate.
Rental Income: Earnings from renting property or other assets.
Social Security and Retirement Income: Some Social Security benefits and retirement distributions (e.g., 401(k), IRA) are taxable.
Gambling Winnings: Includes casino winnings, lottery prizes, and other gambling income.
Unemployment Compensation: Taxable in most cases, reported on Form 1099-G.
Other Income: Includes alimony (for divorces finalized before 2019), scholarships, and income from gig platforms.
Exempt Income: Certain income types, like gifts, inheritances, and life insurance proceeds, are typically not taxable.
Now that you understand the basics of U.S. tax obligations, here are the best apps to help you navigate the filing process:
Why It Stands Out: TurboTax offers an intuitive platform that adapts to a variety of tax situations, whether you’re an employee, freelancer, or business owner.
Key Features:
Step-by-step guidance for reporting all types of income, including W-2, 1099-NEC, and 1099-K.
Personalized deductions and credits tailored to your situation.
Live expert assistance through TurboTax Live.
Who It’s For: TurboTax is perfect for individuals with varying income types, especially those with complex returns.
Why It Stands Out: H&R Block combines professional-grade tools with the flexibility of filing independently or with help.
Key Features:
Multiple filing options: DIY, online assistance, or in-office support.
Easy import of W-2 and prior-year returns.
Support for self-employment income, deductions, and credits.
Who It’s For: Ideal for users who want flexibility and access to professional advice.
Why It Stands Out: A completely free option for federal and state filing, including support for self-employment and investment income.
Key Features:
No hidden fees for filing federal or state taxes.
Audit assistance included at no cost.
Seamless integration with Cash App for managing refunds and payments.
Who It’s For: Best for cost-conscious individuals with straightforward tax situations.
Why It Stands Out: TaxSlayer offers affordable plans with robust features for small business owners and freelancers.
Key Features:
Specialized tools for self-employed filers.
Quick refunds with direct deposit.
Support for reporting rental and investment income.
Who It’s For: A great option for budget-conscious small business owners and individuals with multiple income streams.
Why It Stands Out: FreeTaxUSA offers free federal filing with low-cost state returns, making it an excellent choice for confident filers.
Key Features:
Comprehensive income reporting tools, including for gig work and investments.
Deluxe upgrade for priority support and audit protection.
Easy-to-use platform with prior-year import.
Who It’s For: Ideal for experienced filers seeking an affordable option.
Gather Your Documents Early: Ensure you have all W-2s, 1099s, and other forms before starting.
Understand New Regulations: Be aware of new rules, like Form 1099-K for payment app income exceeding $5,000.
Use App Features: Take advantage of deduction and credit tools within tax filing apps to maximize savings.
Check for Errors: Use built-in error-checking features in apps to avoid costly mistakes.
File Early: Early filing helps you avoid last-minute stress and receive your refund sooner.
1. What is the tax filing deadline for 2025?
The traditional tax filing deadline for 2025 is April 15, 2026. If you are living abroad, you have until June 16, 2026 to file your taxes.
2. Do I need to file taxes if I earn less than the income threshold?
It depends on your filing status, age, and whether you qualify for certain credits. If your income is below the threshold, you may not be required to file. However, you may still want to file to claim a refund for any withheld taxes or credits such as the Earned Income Tax Credit (EITC).
3. What types of income do I need to report?
You must report all types of income, including wages (W-2), self-employment income (1099), investment income (interest, dividends, capital gains), rental income, and gambling winnings. Social Security benefits may also be taxable, depending on your total income.
4. What is Form 1099-K and how does it affect me?
Starting in 2025, if you receive $5,000 or more through online marketplaces or payment apps (such as Venmo, Zelle, or Google Wallet) for goods or services, you will receive Form 1099-K. This form reports the income from these transactions and needs to be included in your tax return.
5. Can I file my taxes for free?
Yes, several apps offer free filing for basic returns. For example, Cash App Taxes and FreeTaxUSA provide free federal filing. If your situation is more complex, such as being self-employed or having substantial investments, you may need to upgrade to a paid plan or seek professional assistance.
Filing taxes in the U.S. involves understanding who must file, what income is taxable, and how to ensure compliance with IRS regulations. By leveraging modern tax filing apps like TurboTax, H&R Block, or FreeTaxUSA, you can simplify the process, maximize deductions, and ensure accurate submissions.
Whether you’re a first-time filer, self-employed, or managing multiple income streams, these apps provide the tools and guidance you need for a successful tax season. Stay organized, file early, and let technology make tax season 2025 as stress-free as possible.
