If you would like to do your own taxes, you will be happy to know that the process is actually simpler than most people think. Paying tax accountants to prepare your taxes may not be the best option especially if your finances aren’t complicated. To do your own taxes, you will need three things; accurate records of your annual income, some basic knowledge of the country’s tax code, and adequate time to work on your returns. The following is a step-to-step guide on doing your own taxes. If you have any outstanding questions, make sure to post your question here.
Tax Filing Tips
Keep all your receipts for the year in an organized manner. Ideally, you should have a binder or a dedicated filing system for keeping all your tax-related documents. When it comes to doing your taxes, having everything neatly organized can be very helpful.
Go over your expenses and decide whether to itemize or claim the standard deduction. You can do the calculations on your own and use the higher amount. You may want to consider taking the standard deduction if you do not have high medical costs, or if you don’t pay real estate taxes or a high mortgage interest rate.
There are many tax forms, but the 1040 is the most popular. You will need to attach the W-2 form from your employer to show your annual income. If you have done some freelance work outside your regular working hours, you can declare it under business income if it exceeds $400.
For accuracy and simplicity, consider filing online or using a tax software. For instance, you can use free software like TurboTax and TaxAct online. The USAA, as well as many other banks, offers eFile services free of charge. Therefore, you may want to check with your bank first to see if this service is offered.
When filing your taxes, all you need to do is enter your personal details, annual income, tax credits and deductions into the appropriate tax forms or software. You can choose to send the W-2 form together with other forms, or enter the information in the corresponding boxes when eFiling. Tax forms usually have instructions to guide users on how to add and subtract different entries as required. Be sure to use a calculator for accuracy.
After submitting your tax returns electronically or through mail, you will need to enter the details of your bank account for withdrawal or direct deposit. While you can simply write a check to the IRS, this is not a popular option. After filing, you will receive an email from the IRS confirming receipt of returns.
Warnings and Tips
If your finances are complicated, be sure to consult with tax accountants.
Be sure to watch out for red flags because they can make your tax returns more likely to be selected for auditing.