Straight answers to the questions we hear most about US federal income tax.
Do I need to file a federal tax return?+
Generally yes if your gross income exceeds the standard deduction for your filing status ($15,000 single, $30,000 married filing jointly for 2025). You should also file if you had tax withheld and want a refund, or if you owe self-employment tax.
What's the difference between W-2 and 1099 income?+
A W-2 employee has taxes withheld automatically, and the employer pays half of FICA tax. A 1099 contractor receives gross pay with no withholding, must pay quarterly estimated taxes, and owes the full 15.3% Self-Employment Tax. See our
full comparison.
Should I take the standard deduction or itemize?+
Take whichever is larger. Itemizing only helps if your deductible expenses — mortgage interest, state and local taxes (capped), charitable donations — exceed the standard deduction for your filing status.
When are quarterly estimated taxes due?+
Typically mid-April, mid-June, mid-September, and mid-January of the following year. These apply mainly to self-employed individuals and anyone without sufficient withholding. Use our
Self-Employment Tax Calculator to estimate your liability.
What happens if I miss the filing deadline?+
If you owe tax, you'll generally face a failure-to-file penalty and interest on the unpaid balance. Filing an extension (Form 4868) extends your filing deadline but not your payment deadline — you still need to pay estimated tax owed by the original deadline to avoid penalties.
Is unemployment compensation taxable?+
Yes, unemployment benefits are generally taxable at the federal level and must be reported as income, though withholding isn't automatic unless you request it.
What's the difference between a tax credit and a tax deduction?+
A deduction reduces your taxable income before tax is calculated. A credit reduces your tax bill directly, dollar for dollar — making credits generally more valuable than a deduction of the same dollar amount.
Do all states have income tax?+
No. A handful of states (including Texas, Florida, and Washington) have no state income tax. Our calculators cover federal tax; check your specific state's rules separately.
Do I owe FICA tax if I'm self-employed?+
You owe the equivalent as Self-Employment Tax — both the employee and employer portions of Social Security and Medicare combined (15.3%), since there's no separate employer to split it with. See our
FICA explainer.
Can I still contribute to an IRA to reduce this year's taxes?+
Traditional IRA contributions are generally allowed up until the tax filing deadline (not extended deadline) for the prior tax year, and may be deductible depending on your income and whether you're covered by a workplace retirement plan.