Preparing Your Taxes
I need tax help! Last year, I was single and I rented. I filed the 1040EZ, same as I had every year since I was sixteen. This year, I am married and own a house. I am not sure what I need to do this year for my taxes. Also, I want to buy some tax preparation software and I read that this is tax deductible. Most of the advice I am finding is for people with investments and children. I have neither. What advice can you give me for the upcoming tax season?
I do my taxes online. If you go to www.irs.gov, you will find links to many online tax programs. Depending on your circumstances, you may be allowed to use these programs free and even to e-file free. The requirements are clearly listed under each program link. You can even do your taxes online, print out the forms, and mail them or copy them to avoid being charged, if you do not qualify for the free programs. The question and answer format on the one I use is very easy to use and help is also available. I did my friend's taxes in about three hours using one of these programs yesterday. Be sure to have all of your tax paperwork organized before you start, but if necessary, you can save your work and return later to finish.
Cut Through the Stress with TaxCut
If you purchase tax prep software, I would recommend TaxCut that is put out by H & R Block. The software is very user friendly. You can also go to www.hrblock.com and prepare and e-file your federal taxes for free. The only charge is if you file a state return ($14.95).
Being married and owning a home can be helpful at tax time. Be sure to file a married filing joint return. This is the best filing status for married couples. If your home is mortgaged, the company should send you a form telling you how much you paid in mortgage interest. This can be deductible if you can itemize. To itemize, your deductions have to meet or exceed your standard deduction. Home improvement and repairs are not deductible. These add to the value of your home and increase its worth. Be sure to keep all receipts and meticulous records of any home improvements. If you ever sell your home, the improvements can effect how much, if any, you would pay for a gain on the proceeds of the sale.
Also, depending on your age and your income, you could qualify for earned income credit, even with no children. Remember that it doesn't cost anything to ask questions, so don't be afraid to call your H&R Block office and ask. Or go to their website.
Check Out Local Library
Here in Detroit, the main branch of our local library offers free tax preparation if your income is below a certain level ($30-$40k I believe). You may want to check with your library to see if they offer it. You can also find free tax forms/instruction booklets there, as well as at some post offices.
If you want to try to file your own but you still have questions about certain deductions or forms, there is a 1-800 number listed in the instruction booklet. I've called them myself on occasion, and believe it or not, they actually do answer.
Insider Report: What This CPA Uses
I am a CPA and have been doing taxes most of my life. I have used both TaxCut (H&R Block) and TurboTax with success. You can get a pretty good deal by looking in the Sunday paper and watching the office supply stores for the best deal. The beauty of these software programs is that they will ask you questions and you just fill in the blank. That assumes you have a computer. The alternative is to get Circular 17 from the IRS and lots of forms. You can (if your income is low enough) go online to the IRS and do electronic filing, but you have to know what to do.
Have your closing statement from your house purchase with you when you complete the return and look for "points," "loan origination fee," and "interest to." These are all deductible.
Try Turbo Tax
I'm no accountant, but I do like to use tax software. Turbo Tax, in my opinion, is one of the best. And if you qualify, you can do your taxes for free. Check out www.TaxFreedom.com. And Turbo Tax will lead you step by step and tell you how to file, what to file, and you can even electronically file. If you don't qualify for free taxes, you will have to pay $19.95 each for federal and state taxes. The forms will be printed right from your computer and that's a lot cheaper than what some of the big companies charge to do your taxes!
Get your biggest tax refund. Start free at TurboTax
Get Assistance from AARP
If Sara is a lower to middle income taxpayer, she can get her taxes done for free by Tax Aide, a free tax preparation service sponsored by AARP. She does not need to belong to AARP nor does she need to be a senior citizen to take advantage of the service. She can go to AARP's website and follow links to find the closest Tax Aide site or find her nearest AARP office in the phone book. Likewise, the IRS offers the same free service through their VITA program.
Back to School
Check with your local colleges. Some community colleges or state colleges offer free tax help to everyone under a certain income (and the income level tends to be generous). You do not have to be a student at these institutions, in many cases, to receive tax assistance.
Take the Next Step
- Get your biggest tax refund. Start for free at TurboTax.
We're still paying off last Christmas and worry how we'll afford the holidays this year without charging it again! Tell us: Yes, we could use help getting out of the debt trap we're in! or No, debt is not a problem for us but I'm always looking for ways to trim my family's expenses further!