Whether you’re filing as a household or as a business, having the right software makes tax season less of a headache.
You can do your taxes yourself the old-fashioned way, by hand, but why would you? There is tax software that helps you navigate all the forms yourself, or you can hire a professional to do it for you.
The Best Way to File Your Taxes
Before tax day arrives, ask yourself a few questions about your tax situation to determine the best way for you to file as an individual, or for your business.
How complicated is my status?
If you only have one job and it’s your only source of income, your taxes may be a walk in the park to file. However, if you have multiple incomes, lots of itemized deductions, or have experienced a lot of life changes (buying a house, having children, etc…), your status is more complicated.
How soon are my taxes due?
Whether or not you have a complicated tax situation, you need to be aware of the looming deadline for filing. Tax Day in the United States is usually mid-April, and in 2022 it falls on April 18. Do you have enough time to sort through your paperwork yourself in order to meet the deadline for both state and federal taxes?
How much can I afford to pay for filing my taxes?
If you’re on a budget, doing your taxes by yourself may seem like the best option. On top of potentially owing taxes, you may not want to also shell out money to have someone prepare the forms for you.
On the flip side, hiring someone to go through your taxes and file them may actually save money. Here’s a look at what you may need to spend in order to file your taxes:
- By hand yourself: Free if you don’t consider the cost of postage
- Basic software: Between $20 and $50
- Advanced software: Between $50 and $100
- Hiring it out: A certified public accountant (CPA) or an attorney may run you upwards of $300
When considering how much you can afford to pay for filing your taxes, don’t forget to factor in the value of your time.
How much do you want to know about your taxes?
For some people, knowing the ins and outs of their tax status is important. For others, they just want to get it done and get a tax refund and forget about the process until next year. If you’re running a business, it’s probably a good idea to know as much about your taxes as possible. In the event you’re ever audited, it’s important to be informed. The IRS doesn’t care who’s been handling your taxes if they notice any discrepancies; the responsibility is all yours.
The bankruptcy experts at Rulon T. Burton know the importance of having a healthy financial record, as missteps can affect your credit score for years to come. In addition to properly handling your taxes each year, read what Burton and Associates have to say about making informed financial decisions HERE.
Best Tax Software
There’s still time to invest in a basic or advanced tax software and file your state and federal taxes yourself. If you’re willing to invest in the right eCommerce software to keep your business running smoothly, consider doing the same for your taxes. According to NerdWallet, the following are some of the best tax software options available for doing your taxes yourself.
H&R Block Free
You can use this tax software to file Form 1040, Schedules 1 and 3, W-2s (income wages), 1099-INT (bank interest), 1099-DIV (dividends), and 1098-E (student loan interest). You cannot use H&R Block Free to file Schedule A (itemized deductions), Schedule C (self-employed or freelance deduction/expenses), or 1099-SA (HSA distributions).
You can upgrade H&R Block to paid packages if you need to file itemized deductions and credits. If you’re self-employed, there’s a package for that as well.
TurboTax Free
This software allows you to file your 1040, and both state and federal returns. You can’t, however, itemize your filing or file Schedules 1, 2, or 3 with the free version. Like H&R Block, you can upgrade to paid packages for more advanced filings, including self-employment. People like TurboTax for its Q&A capabilities while filing.
TaxAct Free
You will need to budget for about $40 to file your state taxes with TaxAct, but it’s otherwise free to prepare simple taxes that include dependents. You can upgrade to other packages that allow for itemized deductions, self-employment income and expenses, such as Schedule C and Schedule F filings.
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