Stock investing for dummies
This post is part of the TaxAct #DIYtaxes blog tour which empowers you to take ownership of your finances by doing your own taxes. TaxAct provides the tools and guidance to help you confidently file your taxes easy and fast. Do your own taxes today at TaxAct.com. You got this.
If you’ve planned on doing taxes yourself but have been pushing them off, I’ve got bad news: you’re almost out of time! With the income tax filing deadline just a couple of weeks away, it’s time to get your documents together and get your taxes filed.
The good news, though, is that if you’ve been planning on doing taxes yourself it’s really not as scary as it seems.
Here are six tips for filing your own taxes that will make it as painless as possible.
Get Organized For DIY Tax Prep
The first and most important thing you need to do is get organized. Gather up all of your important tax documents so they’re all in one place.
One of they tips I use is an Income Tax Binder to stay organized all year. When I get statements in the mail, I simply put them in the binder. Then, when it’s time to do my taxes, everything is already in one single place.
Here are some of the most commonly needed tax documents:
- W-2: Your employer will provide this and it shows your earnings.
- 1099-MISC: Provided by clients if you’re self-employed or have worked as an independent contractor.
- 1099-INT: Provided by your bank to show how much interest you’ve earned over the year.
- 1099-DIV/B: Provided by your investment brokerage and shows your capital gains or losses and dividend income, if any.
- 1098-T: Provided by your school to show how much was paid in tuition by you.
- 1098-E: Provided by your student loan servicer and will show what you paid in student loan interest.
It’s possible that you have more than just these forms but these are some of the most common. Also, all of these may not be relevant to your situation.
Other than these common tax documents you’ll need last year’s taxes and basic information, plus personal information of any dependents you’ll be claiming (like birthdates and social security numbers.)
Follow The Prompts On Your Tax Software
The tax software that you use will have very specific prompts that are easy to understand. (I promise.)
Filing taxes yourself is as simple as answering questions if you’re using good software like TaxAct. Read through every question carefully and answer to the best of your ability.
You don’t have to worry about guessing. Just follow the directions! If you need help, simply search the knowledge bank or call right away. It may seem like a burden, but it’s worth the effort.
Rerun The Numbers
Once you’ve filled in all of your information, go back through and check your numbers. Look at everything you’ve inputted, including your social security number, birthdate and tax document information. Simple typos are of one the most common problems people have on their tax returns. Just look at the comment section of our article Common IRS WMR Errors and Questions.
After you’ve doubled checked your numbers, run the alerts on the tax software you’re using. These alerts will show you any places you’ve potentially made mistakes. Go back and check any problem areas.
If you’re feeling like you’re a little bit above your head, ask for help! You can look for information online or find a tax professional who can answer your questions.
Decide How You’ll Get Your Refund
Once you’ve got your taxes ready to file, you’ll need to decide how you’re going to receive your refund. There are three popular options:
Check by Mail: This is a free option but typically takes the longest to receive.
Direct Deposit: Having your refund direct deposited is another free option and is faster than getting a check in the mail. I highly recommend direct deposit.
Tax Anticipation Loan: Some tax preparers offer tax anticipation loans which can help you receive money quicker but will come with a high fee. Since the average tax refund is made by the IRS within 21 days, I recommend you avoid tax anticipation loans.
If your refund is taking longer than expected to reach your bank account you check the status here.
Keep Yourself Organized for Next Year
Once you’re all finished filing don’t forget about next year. You’re going to have to do this again in 12 months, so don’t simply toss everything in a drawer and forget about it.
Create yourself a list and find a folder or basket where you can collect everything you need for taxes all year long. You’ll also need the information from this year’s return as well. TaxAct will remember your information, but it’s good to keep paper copies of everything. Keeping all this together will make filing next year’s taxes a breeze!
File an Extension If You’re Going to Miss the Deadline
If, for some reason or another you’re not going to be able to file your taxes by the deadline, which is April 18th this year, you’ll need to file an extension to avoid penalties.
You can file an extension with tax software such as TaxAct. It’s free to file an extension – but remember, if you owe taxes, you’ll still need to pay by April 18, or you’ll face penalties and interest. If you’re getting a refund, it doesn’t matter if you file late – but you’re just letting the IRS keep your money.
Doing Your Own Taxes Doesn’t Have to be Hard
Doing your own taxes doesn’t have to be hard. In fact, doing your own taxes is a great way to raise your own awareness of your financial situation, learn and save money. And if you use good tax software, all you’ll need to do is follow instructions. I’ve been doing my own taxes since I was a teenager. It gets easier every time you do it because you get used to it. The first time filing your taxes will take longer, but you’re finances will thank you for taking the time and doing it right.
Beating the tax deadline doesn’t have to be stressful. With TaxAct, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple federal and state return FREE today with TaxAct.
– stock investing for dummies