Filing Your Own Taxes
Filing Your Own Taxes Doesn’t Have To Be Hard. Read These 4 Tips
When I had enough income that required me to file a tax return, I used my family’s accountant. He was a local accountant, and certainly wasn’t cheap. Over the years, I stayed with this guy for convenience, and hadn’t even considered that maybe filing your own taxes would be better.
It wasn’t until I discovered a major error on my tax return that would have cost me a lot of money, if I hadn’t caught it, my eyes were opened. I realized the cheapest and probably best way was to file your own tax return. Even though I hadn’t done them myself before, my return was fairly simple, and I dove right in.
I went online to one of the giants in the online tax filing business. When I started out, it was simple and I thought I would be getting a free tax return filing, or so it was advertised. I was notified I would be going from free to 59.95, plus extra for my state return. Wow, why does it cost so much to file my income tax online?
You’re not required to be a trained accountant just to do your own tax return
The first thing you need to consider is your basic knowledge of finances. In today’s world, It’s hard to believe that anyone could be clueless when it comes to handling money. If so, those folks might be better off going to a professional tax preparer.
For anyone else, filing your own taxes online is a very easy thing to do. Most certainly, very few that prepare their taxes online are financial experts. These online programs are carefully designed by a series of simple, yet very pertinent questions. From the answers that you give, the program will know what tax forms you need to complete your return.
What computer skills do I need?
Although it’s true that you can file your own tax return with a pen and a calculator, using a computer is so much better. If you want to file the most accurate tax return, and get every deduction and tax credit you’re eligible for, a computer is a must. If you’re filing a very simple return, you might get away with using a smart phone. But if you have more than a couple of tax forms, you really need to be using a computer.
The basis computer skills you might need are being comfortable with a mouse or keyboard and opening and closing files. If you’re able to attach files to an e-mail, you probably have the skills to do your taxes online. It really is easy to do.
The more simple your finances are, the easier it will be filing your own taxes. Most filers today don’t even have to itemize their deductions because of the Tax Cuts & Jobs Act (TCJA) that became effective January 1, 2018. It actually almost doubled the standard deduction for all filers. For 2018, the standard deduction was increased from $6,500 to $12,000 for single filers.
The Act also eliminated the miscellaneous deductions category, thereby removing a lot of deductions that had been available before. In doing this, many tax filers file a very simple return using the higher standard deduction.
However, for those who have a side hustle, and are required to file a Schedule C, self employment schedule, it may seem a little overwhelming at first. But even for most of those type returns, you don’t need a professional tax preparer.
How do I start to file my income tax online?
The first thing you need to do is to get all of your tax information organized. Gather your W-2(s), 1099’s for interest, dividends, stock sales, and maybe 1099-NEC for a side gig. If you’ll be able to itemize your deductions, real estate taxes, mortgage interest, charitable contributions, etc.
Once you begin to do your taxes online, it’s best if everything is handy, and you don’t have to stop to look around for a missing document. The key to having a stress free filing experience is to have all of your information there when you need it.
Which tax filing program is best for me?
Once you decide to do your own tax return, you have a few options available. One option is to buy a tax preparation program that you install on your computer. Another is to download one from the internet, or use one of the online tax filing sites. We recommend filing your own taxes using an online site.
We realize it can be confusing with all of these options, to decide which is best for your individual tax situation. Installing software on your computer is not recommended for a couple of reasons. It needs to be updated often as the IRS makes changes, or the software developer corrects problems and other issues.
Also, if your computer develops problems, crashes, or otherwise can’t load the program, you’re out of luck. For that reason, we recommend the online filing solution. It’s based in the cloud, is constantly updated by the developer, and is available to you anywhere with proper login credentials.
Two of the giants are Turbotax and Block, and in our opinion, offer confusing pricing options. Add a form while you’re in one pricing tier and up goes your cost. Even in their free return tier, the state return costs you extra, sometimes a lot extra. Add a Schedule C for your side hustle, and the price leaps to well over $100.
The online tax program that we highly recommend is 1040.com. They’re not one of the most popular programs like the two mentioned above, but have been in business since the advent of electronic tax filing. 1040.com is a division of Drake Software who developed their software program.
Many years ago, HBS Financial Group teamed up with 1040.com to file all of our online tax returns exclusively. The program was developed for the DIY tax filers and is easy to use.
This same tax program is sold by Drake to over 30,000 accounting firms across the country and the HBS Financial Group is proud to be one of them. Support is USA based and outstanding. A few years back, they decided that the confusing pricing tiers was not serving taxpayers as it should.
They came out with a flat rate pricing of $25. From a very simple return to the most complex, the same price applies. The low flat price includes your federal return, state return, and also electronic filing. Everything for $25! Compare that to the other industry giants where the extra state return cost is around $39.95, and you’ll see why filing your own taxes with us is your best option.
Before you commit, you can try before you buy
One of the nice features of our online tax program is that you can literally do your taxes online and review the return for free. You only pay if you decide to file your taxes. You have no commitment or obligation. If you don’t like the program, or just change your mind, you can leave without spending any money.
So, if you can handle a computer, even with basic skills, there’s no reason why filing your own taxes is difficult. Thanks to our easy to use program and its very low cost, you stand to save a lot of your hard earned money. You have nothing to lose but a little of your time, and a lot to gain that will save you money for years to come.