With more chatter about getting your taxes done, one question comes to mind. What’s the fastest and most inexpensive way to get it done? Today I would like to discuss preparing tax returns on your own.
If you always had your taxes prepared, doing it on your own may seem risky, time consuming, daunting, and nerve wracking. Although these are all valid concerns I still would like to encourage you to at least try it. What actually happens when you do taxes on your own? The first step requires you to provide lots of information about yourself so that a product you use can select the proper forms and pull data from appropriate tables. The whole process is a type of an interview where you answer questions that have impact on how much you end up paying in taxes: marital status, employment, children and other dependents, etc. The software handles all the forms based on the answers you give. For straightforward tax situations this process is quite easy and takes less time that you would imagine.
The main reason I recommend you prepare taxes on your own is to learn about the process and understand what goes into a tax return and how different answers affect it. It will make you a more astute decision maker and many tax software products can even make suggestions on how to prepare for the next tax season. One more reason for which I recommend you give tax software a try is that at the end if you’re not satisfied or unsure, you can just abandon it without submitting your return. You can go back to the ways you’re familiar with but keep the experience you gained. Your only investment is time.
Going back to the original question, how to file taxes for free? You do that through freefile found on the irs.gov. It is a federal-private partnership that allows taxpayers whose annual income is less than $58,000 to submit tax return electronically. You begin the process on the IRS website that will then take you to another page where you select a private company that lets you file the federal taxes for free. This year there are 14 companies including all the leading brands such as TurboTax, H&R Block, Tax ACT, and Tax Slayer among others that participate in the offering. Each of them has a little bit different requirements and the IRS can help you pick the most appropriate one. By clicking on “help me find freefile software” you will answer a few questions (your age, estimated 2013 adjusted gross income, state of residence, earned income tax credit, and military pay) and it will then suggest the appropriate product to use. You will need an email address as well as the required documents to complete the tax returns.
By doing everything electronically, the IRS will get your taxes in no time and if you qualify for a refund you can have it deposited directly into your checking account. Finally, track your refund with Where’s my Refund on irs.gov to know exactly when to expect it.
Final comment, because of the government shutdown last fall, the current tax season won’t start until January 31st but if you have all your documents ready, you can prepare your taxes and fill out all the forms. The company whose software you select to aid you in preparation process will keep that information until the 31st when it transfers it to the IRS.