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6:21 PM / Saturday April 20, 2024

23 Dec 2012

Expert tips for doing your own taxes online

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December 23, 2012 Category: Color Of Money Posted by:

BPT

 

Thanks to the convenience of online tax return preparation websites, more Americans are doing their own taxes. Do-it-yourself tax preparation solutions give taxpayers a fast, convenient and affordable way to file income tax returns.

 

“Doing your own taxes really isn’t as daunting as it may seem,” says Jessi Dolmage, spokesperson for TaxACT. “Tax preparation solutions put the complicated tax code in plain English and give step-by-step instructions from start to finish. If you have questions, they offer resources and experts for help.”

 

Dolmage says most brands allow you to try their products risk-free. You can use online products without creating an account, and downloadable software often includes money-back guarantees.

 

Whether you love or hate income tax season, save time and maybe even some money using these simple tips.

 

Start by gathering all your tax forms and documents, including:

 

  • Last year’s federal return (and your state return if applicable) for comparison purposes
  • Form W-2 for wages, tips and pensions – keep in mind employers have until Jan. 31 to distribute to employees
  • Form 1099 for interest, dividends, state tax refunds, retirement plan distributions and unemployment – issuers have until Jan. 31 to distribute
  • Form 1098 for mortgage interest paid
  • Retirement plan statements
  • Schedule K-1 from partnerships, S corporations, estates and trusts
  • Estimated tax payments
  • If you itemize deductions: receipts for health care expenses, state and local income or sales taxes paid, mortgage interest and points, charitable gifts, work-related costs, investment expenses, and casualty and theft losses
  • If you’re a business owner, documents related to income statements (1099-MISC and payment stubs not reported on 1099s), health insurance payments and pension plan contributions (such as Keogh, SEP and SIMPLE)
  • Social security numbers for you, your spouse and your dependents
  • Bank account and routing numbers if you want to receive your refund via direct deposit or pay your taxes electronically

 

Second, make note of life changes in 2012. Events like marriage, divorce, college, switching jobs, having a child and moving can mean hundreds or thousands of dollars difference in your bottom line.

 

Next, take a few minutes to familiarize yourself with key tax law changes. Income taxes are a substantial component of your personal finances, so it’s in your best interest to have a basic understanding of changes from year to year. For a summary of major changes, read the first few pages of Publication 17 on the IRS website at www.irs.gov.

 

When preparing and filing your return, be sure to:

 

  • E-file. It’s secure, convenient and you’ll receive confirmation when the IRS has processed your return.
  • For the fastest refund, e-file and choose direct deposit.
  • Before filing, double check Social Security numbers, bank account numbers, and spelling of names. Misspelled and wrongly typed numbers and names are among the most common mistakes made on returns.
  • File and pay by the April 15, 2013 deadline to avoid IRS penalties and interest. If you file for a 6-month automatic extension, remember any balance is still due by April 15.
  • Don’t procrastinate. Rushing can lead to costly mistakes.

 

More tax tips and information can be found at www.irs.gov. To do your federal taxes free with TaxACT Free Federal Edition, visit www.taxact.com.

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