It's tax time once again, and for many people, this can mean anxiety. Thousands of people each year file their taxes for the first time. This task can be very daunting to anyone who has never had to file or has never filed on their own before this year. There is a multitude of tools and websites available to make this process an easy one, no matter what your technical knowledge is. This article will act as your ultimate guide to successfully filing your taxes. We will go over the documents you will need, tools you can use to file, tax experts who can help you, what forms to fill out, and how to handle things like overpayments, overdue amounts, and filing extensions.
As your deadline to file your taxes gets closer, it is a good idea to get all of the necessary personal information and documents together in one place. If you have everything organized and in one location, this will ensure you don't forget anything and have problems with your taxes later on after you've filed.
In order to properly file your taxes, the Internal Revenue Service (IRS) has to know who is actually filing the tax return, as well as how many people will be covered or claimed on the tax return. You will need your social security number, your spouse's social security number if you're married, and the social security numbers of anyone you plan to claim as a dependent on your tax return.
You will need several important pieces to file your tax return efficiently and accurately. All of your income information must be documented, as well as your spouse's if you're married. The pieces you'll need are listed below.
If you can claim these additional adjustments, they can help you reduce how much you might owe in taxes. This increases your chances of getting money back in the form of a refund.
Credits and Deductions
Every credit and deduction you can claim can lower the amount of money you may owe the IRS come tax time. There are many available for you to look at, and you should have all of this information ahead of time. You will need to bring in documents that prove you paid these costs and expenses.
Deductions are things you can pay during the year and subtract the total amount from your overall income level when it comes time to file your taxes. The top five deductions people put on their taxes are listed below.
1040 Form. The 1040 Form is the generalized form you use to file your taxes if your income or your and your spouse's combined income is over $50,000 annually. It is also used if you have self-employment income and income from a property sale.
1040a Form. The 1040a Form is the form you would file if your personal or combined incomes are below $50,000 annually. You can only add IRA or student loan adjustments to your income with this form. You also do not itemize your deductions.
1040EZ Form. The 1040EZ Form can be used if your income is below $50,000. If you're married, both you and your spouse's income must be below $50,000 annually. It's better to use if you have no dependents, are under 65, and have an interest income below $400 per year.
The less complicated the form is you choose to use, the less room for error and complications there is. If you use the correct form, you may also have fewer costs in filing fees. If you're still not sure which form to use, you can click here.
There are several tax preparation software tools and programs available to help you file your taxes correctly.
eFile.com lets you file your 1040EZ return form for free. You have the option of filing individually or jointly with your spouse. State Filing can also be done for a fee of $19.95, and there is a support team available 24 hours a day, 7 days a week to assist you with any questions. You can't claim dependents, make over $100,000 per year, or have a mortgage. The Standard package is free, and the Deluxe and Premium packages cost $29.95 and $39.95, respectively.
H&R Block eFile
H&R Block offers a free e-File option that allows anyone who uses it to import their tax information into their system from any competitors. You are also able to directly upload any tax documents, and file your tax return on any laptop, desktop, or tablet. H&R Block offers three versions for e-filing. The Basic edition is free; Deluxe is $54.99 a year, and Premium is $79.99 annually.
Jackson Hewitt offers several tiered versions of their tax filing software. There are no income requirements to use this software, and you can file both federal and state taxes for free. The free software will only support basic tax information like W-2s, unemployment income, and interest income. If you have any other income like student loan interest or dependents, you'll have to use one of their paid software options. The Basic package costs $39.95, and the next tier is Deluxe at $54.95. The final package is Premium, and that costs $79.95 annually.
Tax Act has free online filing for both state and federal taxes. They also have desktop software versions available as well. Their software works you through the pages using a question and answer format. They give you unlimited email and telephone support for all of your questions. You can track your refund directly once you file. Tax Act offers three versions of their software starting with the Basic free version. They also have a Plus package for $37 and a Premium package for $47 annually.
TaxSlayer enables you to file your 1040, 1040A, or 1040EZ online in an easy step by step process. The software will guide you through each page, and you will input your information when you're prompted. You can get W-2 imports free, and filing your state taxes with the free software will cost $19.99 per year. TaxSlayer also has four packages available for purchase. The Basic is free, Classic is $22.00 a year, Premium is $40.00 a year, and Self-Employed is $55.00 annually.
If you're filing a 1040A or 1040EZ form, you can use TurboTax's free software to submit your paperwork. You simply scan and upload your W-2 form as a file, or take a picture of the W-2, and TurboTax will fill in the right fields. You'll work page by page answering questions about your income, deductions, and dependents, and TurboTax will e-file your taxes once you're done. You have to make below $100,000 to be eligible to use this free software. You also must not have any large medical bills, and you can't claim any business, investment, or rental income. There are 4 packages you can choose from. The Basic package is free, Deluxe is $54.99, the Premier is $79.99, and the Self-Employed is $114.95 per year.
If you're leery of filing your taxes on your own, several agencies will submit them for you. You call and schedule an appointment and bring all of your required tax documents with you. The tax preparer will look everything over and input it into their system. They will ask you questions about your filing status and any dependents, along with deductions.
If you realized you made a mistake when you filed your taxes and overpaid, you can fix this problem. The first thing you do is a double check that you did overpay. If you found out you did overpay on your taxes, start the process of amending your tax return. You should fill out and submit a Form 1040X if you filed individually. Once this is submitted, fax or mail this into the IRS. The IRS will double check that this information is correct and if it is they will send you a check for the overpayment amount. It will take 8 to 12 weeks for you to get this check. There are three things to keep in mind when you're filing an amended return, and they are listed below.
If you're late filing your taxes, the IRS will apply penalties for each month you don't file your return. This penalty can be up to 25 percent of what you'll owe on your tax return, and it adds on every month you're late. You should pay your taxes as soon as you're able to, and if you can't pay the full amount call to set up a payment plan. There is a one-time filing fee to get the payment plan in place. If you continue not to pay, once your debt reaches around $25,000 a representative from the IRS will come to your home. They can have you put in jail for up to three years for failure to file, as well as additional penalties and fees. They can also garnish your wages until the debt is settled.
If you know you're going to be late on filing or paying your taxes, file an extension. Form 4868 is the form you want to fill out and send in as soon as possible. You can be granted up to six additional months to file and pay your federal and state taxes. This will also alleviate any late fees or penalties as long as you pay by the time the six month grace period is up.
This article has gone over several different options for you to be able to file online. We also touched on tools to help you and all of the information you will need to be able to file your taxes successfully. We listed deductions as well as what forms you have to file and the requirements. Finally, we went over what to do if you owe the IRS if you overpaid, and how to file an extension. If you take the information from this article, you should have success when it comes time to file your taxes.