Have you filed your taxes yet this year? No worries, April 17th is the due date this year to have your taxes filed. By doing them yourself, you will save on tax preparation filing fees. For those of you who have never done your own taxes before, read on, I’m going to give you some great resources for filing your taxes in today’s article.
Free Help From The IRS
Because taxes are required to be filed (it’s the law) the IRS is there to help you get it done. There is a program called the Interactive Tax Assistant that will help you to get specific questions answered. This is one of the best tax sites because it is free. Also, there are resources on the IRS page including the IRS withholding calculator. This calculator can assist you by making sure that you have the right amount of taxes withheld from your paychecks.
If you earn less than $54,000 per year or if you are disabled, you are eligible for free tax preparation assistance from IRS-certified volunteers. Just call the Volunteer Income Tax Assistance program, also known as VITA, at 1-800-906-9887. Volunteers from VITA are also often found at libraries, schools, shopping malls, and other public places.
I’m going to go over some of the best and most popular tax sites used today. Though many are very similar, there are slight differences including costs and features.
Turbo Tax is one of the most used tax preparation software packages. It is one of the most expensive tax resources, but also considered one of the easiest tax programs to use. It will let you import as many employer tax IDs that you need to. You also can take photos of your W-2s and 1099 forms instead of typing in all of the information. This is a great feature because you don’t have to risk making typos or mistakes. If you are self-employed, there is a feature called Expense Finder that will aid you in recording all of your expenses. This feature can help you find deductible expenditures directly from your bank account and then help you categorize them.
H & R Block
This tax preparation service does almost everything that Turbo Tax does, but it is a bit cheaper. This service has a chat line that allows you to ask questions and also decipher your answers. They have many live professional tax consultants ready to help you with any issues or problems that you may have.
Credit Karma Tax
This service offers free federal and state tax return help. There are no hidden fees whatsoever. All users are entitled to the same features. Credit Karma Tax was launched in 2016. In that first year, 1 million tax returns were filed with Credit Karma Tax.
Credit Karma Tax is different than most tax programs in that it offers just one plan with all the features included at no extra cost. Most other programs include differently priced plans that include more or fewer features. With Credit Karma Tax, everyone gets to use the same features without any need to upgrade.
Taxslayer offers a free filing option and also offers options to upgrade for a fee. Most people use Taxslayer when they have simple returns such as 1040EZ. Most other returns will require you to use the TaxSlayer Classic which costs $17 for a federal return. TaxSlayer Premium is the next featured program up which will allow you to consult with a professional as you fill out your return. The Premium feature costs $35. State returns cost $22 to file.
Liberty Tax is priced lower than TurboTax and H & R Block. One disadvantage of this service is that you will have to pay to file a basic 1040EZ return. A 1040A will cost you $24.95. Liberty also has a deluxe version that will cost you $44.95. The deluxe version may be necessary if you have investment income. Small business owners are recommended to use the premium version for $69.95.
FreeTaxUSA offers free federal returns and a small fee for state returns. The fee for a state return beats TaxSlayer’s state return fee. Many people who are self-employed, take advantage of FreeTaxUSA instead of paying high costs that others charge for self-employed tax returns.
TaxAct is a user-friendly tax service that has pricing comparable to the bigger name tax programs such as Turbo Tax and H & R Block. However, it can’t do much of what the other programs do. For example, it cannot import your W-2 like H & R Block and Credit Karma can.
TaxAct has a free version for forms 1040EZ and 1040A. If you have a home or would like to maximize your deductions and credits, you will pay $27 for TaxAct Plus. Self-employed filers can use the Freelancer version for $39. TaxAct Premium costs $51 and includes all of the features of other versions plus audit protection. The cost to file a state return is very high at $37. Compared to other services, the state return is one of the highest out there.
What You Need To Gather
No matter what resources that you use to do your taxes, you will need to gather all of the information and paperwork that you will need to file. If you work for someone, you should have received a W-2 Form. These are the wages that you made from that employer. If you have an outstanding student loan, then you should have received a Form 1098-E that will include your student loan interest.
Other forms that you may need to bring include the following: W-2G (gambling winnings), 1099-INT (interest), 1099-DIV (dividends), 1099-B (investment sales), Combined 1099 (brokerage combined tax statement), 1099-MISC (independent contractor work, royalties), 1099-R (retirement distributions), K-1 (MLP, Partnership or S-Corp share of income), SSA-1099 (Social Security benefits), 1099-G (unemployment benefits and state tax returns), 1099-C (forgiven debt) and Income Adjustment Documents, including Form 1098-E (student loan interest); 5498 (IRA contributions); 5498-SA (HSA/MSA contributions); and 1098-T (tuition).
I like to set aside a place for all of my tax forms and information as they come in the mail so that I am not scrambling at tax time to find everything. For me, a ziplock bag marked “taxes” works great.
Filing your taxes does not have to be hard or expensive. Perhaps the hardest step is picking out which tax program to use. I hope that I’ve helped you conquer that first step of finding out which tax service will serve your needs the best.