Disclaimer: This Money Saving Tip is not about how to get a bigger tax return. Sorry—wish I could help you there. It is, however, about how to save money when it comes to filing your own taxes.
You’ve probably already started a pile of ‘special mail’ somewhere—your W-2s, 1098 and 1099 Forms, etc. And as you may already know, the three major options when it comes to tax time are hiring a tax preparer, paying a commercial tax company like H&R Block, Liberty Tax, or Jackson Hewitt, or doing your own taxes.
The great news is, when it comes to doing your own taxes, new technology, software, and online services have opened up all sorts of avenues that weren’t available before when it comes to tax preparation and filing assistance.
For most people, filing your own taxes is an option and has several advantages. It’s convenient, comes with a variety of tax and technical support, and usually costs much less than the other alternatives mentioned. Here’s a quick overview of the least expensive do-it-yourself options.
If you are an individual taxpayer or family with an adjusted gross income of $58,000 or less, you can use Free File from the IRS that lets you prepare and e-file your federal return (and some state tax returns) free of charge.
If your income is less than $100,000 and you don’t plan to itemize deductions or claim adjustments to your income or tax credits (other than the earned income credit), you may be eligible to file a Form 1040EZ or 1040A federal return. If this is your situation, you might be able to take advantage of the Basic packages offered by companies like TurboTax ($19.99), E-Smart Tax (free), and H&R Block at Home ($19.95).
The next level of tax filing usually involves itemized deductions. And a lot of questions and decisions! Beyond the Basic tax programs, there are a number of more advanced, sophisticated question-guided online tax preparation programs to help you—Deluxe, Premium, Home & Business, etc. These range in cost from about $29.99 – $79.99.
A good online tax preparation program at this level includes:
Clear, easy to understand directions and questions
Easy to view deduction opportunities and explanations
Free electronic filing
User-friendly online forms that can be saved and accessed at your convenience
Access to technical support
Available tax experts
Future tax planning assistance
Audit avoidance advice and guidance
Regardless of which route you go, remember that each one relies on the accuracy and completeness of your personal financial records, so make sure you’ve got your ducks in a row before you begin!
Robin loves helping people make important connections in their lives and is passionate about lifelong learning. She and her husband Russ have three boys ages 14, 17, and 20 who all know how to get more for their money whenever they shop! Robin also collects sea glass and has a special fondness for English Springer Spaniels.