When deciding to do your taxes you need to make a lot of decisions.The first decision you need to make is whether to file taxes yourself or use a tax preparer to help you. There are a variety of online tax preparation services to choose from as well as in-person tax preparers in your area, however, it’s becoming more and more popular to file your own taxes. Last year, out of 155 million tax returns filed, over 88% were filed electronically, of which 57 million were filed individually. The rest of this article will focus on how to file your taxes, but below are a few useful tools.
Top online tax preparation services
- Intuit TurboTax
- H&R Block
- Credit Karma Tax
- Jackson Hewitt Online
- Liberty Tax
It’s also important to remember that you can turn to IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) program for free tax prep services. You qualify if you earn $56,000 or less, have disabilities, or are older than 60.
Things You’ll Need Before you file your taxes
- Social Security numbers for yourself, yourself, and all dependents. Remember that dependents can include elderly parents.
- W-2 form from your employer
- Contributions to your retirement savings account (this typically is on Form 5498 provided by your employer along with your W-2)
- 1099 forms. This is a record that an entity or a person – not your employer – gave or paid you money. There are a lot of different reasons you might receive a 1099 form. Here are a few examples:
- From your bank because it paid interest on your savings.
- From your clients as a freelancer
- If your mortgage lender canceled some or all of your mortgage, or you were involved in the short sale of your home.
- Donations made in the last year
- Educational expenses, Form 1098-T and/or Form 1098-E. Students can claim a deduction for tuition and fees they paid, as well as for interest paid on a student loan.
- Medical bills
- Information on the local and state taxes you’ve paid
- Your mortgage information and property taxes
- Classroom expenses. If you’re a teacher, you can deduct up to $250 spent on classroom supplies.
- It’s also helpful to have your returns from last year to consult.
Choose between an itemized or standard deduction.
You’ll need to decide whether to take the standard deduction or go through each deduction in an itemized fashion. According to the IRS, over 68% choose a standard deduction. If your deductibles exceed $12,200 for single filing, or $24,400 for joined filing, you should go for an itemized deduction because you’ll receive more of a refund. However, this method is a little more intimidating. A free online tax program or preparer will help you make this decision easier and can guide you through itemizing your deductibles if you choose that method.
Fill out the Form 1040.
Form 1040 is the standard federal income tax form people use to report their income to the IRS, claim tax deductions and credits, and calculate the amount of their tax refund or tax bill for the year. Once you’ve filled in all of your relevant information, you should know whether you owe money or are getting a refund.
Where do I get a Form 1040?
- Online: You can access forms to print off or fill out electronically at irs.gov
- Taxpayer Assistance Centers: There are 401 TACs across the country where IRS offers face-to-face assistance to taxpayers, and where taxpayers can pick up many IRS forms and publications. Visit http://www.irs.gov and go to Contact My Local Office on the Individuals page to find a list of TAC locations by state.
- Libraries or Post Offices: Most libraries and post offices offer free forms to taxpayers during tax seasons. Forms may also be available at your local newspaper, large grocery stores, or office supply stores.
- By Mail: You can call 1-800-TAX-FORM (800-829-3676) Monday through Friday 7:00 am to 10:00 pm local time – except Alaska and Hawaii which follow Pacific time – to order current year forms, instructions and publications as well as prior year forms and instructions by mail. You will receive your order by mail, usually within 10 days.
- File Your Taxes.
Once you’ve filled out your Form 1040 you’re ready to file your own taxes. If you owe money along with your return, you’ll need to send that along with your return or set up a payment plan with the IRS.
Online: You can file your form online for free here: https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free
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