“The only things certain in life are death and taxes.” -Benjamin Franklin
With the IRS tax filing deadline fast approaching, many Americans are scrambling to figure out the fastest, easiest, and cheapest way to file their taxes before the deadline. With that in mind, here are a few things to consider.
Do It Yourself or Pay a Professional
The tax code is horrendously complicated; however, it isn’t that complex for the large percentage of Americans who would be just fine filing their own taxes. If your only income comes from you and/or your spouse’s job(s), then filing your own taxes will be easy. Even if you have a few investments in stocks or your own small business on the side, filing your own taxes is still very doable. If you have income from multiple investments such as rental properties, stocks with capital gains/losses, dividends, or own small businesses, then things can start getting hairy. The advantage of paying a professional to prepare your taxes is that their knowledge of the ins-and-outs of the tax code will allow you to pay the absolute legal minimum for your situation, thus maximizing your refund. It also prevents the headache of preparing your own taxes. If you have a variety of income sources and/or possible deductions/credits to claim, then you may want to consider using a professional. But if you have relatively simple finances with only a few normal sources of income, you can file your own taxes in less than an hour and still get your maximum refund.
Options for Filing Your Own Taxes
Most people can file their federal tax returns for free through TurboTax, H&R Block, or the IRS website; however, there may be a small fee to file your state returns. If you are military or your adjusted gross income (AGI) was less than $30,000, then you may be able to file both federal and state returns for free through TurboTax or H&R Block. I was able to file for free with both TurboTax and H&R Block. I filled out federal and state returns using both software options; and, they both offered me the same exact tax refunds. However, TurboTax was much easier to use than H&R Block. While both options were relatively straightforward, TurboTax was quicker and simpler to follow along with; I finished with TurboTax in less than 30 minutes. All you will need are any W-2s from your jobs and any tax forms you may have from your bank or investments.
Get Your Max Refund
Claiming deductions can have a big impact on the amount of money you get back. The standard federal deduction that all people can claim is $6,000 for singles and $12,000 for married couples filing together; many standard state deductions are much lower though. If you choose to itemize your deductions and claim more than the standard, here are a few common ones to remember, especially for your state returns–charitable donations, some retirement account contributions such as IRAs and 401(k)s, mortgage interest, business/job expenses, educational expenses such as school supplies and books.
Tax season can be stressful and overly complex, especially when trying to meet the filing deadline. If you are a young single or a young family with simple finances (especially students and military), I would recommend filing your own taxes for free through TurboTax. If you have more complex finances, save yourself the headache and stress and just pay a professional to prepare your return.