April is a refreshing spring month. The dreary snow and ice of winter are all but gone. And the flowers are blooming – along with some new gray hairs on your head because guess what, it’s tax season again. But completing and filing your own tax returns may be easier and less stressful than you think. You might be able to file your own taxes with the IRS for free; no pricey pro needed. With the right prep and some simple advice, you can take advantage of IRS free file tax programs. We’ll show you how to save time and money and take control of your finances. Find out if you’re eligible to file your taxes online or if it’s best to hire an accountant.
Who Can Get IRS Free File For Taxes?
According to the IRS, over 70% of taxpayers in the U.S. are eligible to use free software to file their tax returns. All you need to do is visit the IRS website and use the Free File software to prepare and submit your tax returns. This is sometimes called E-filing.
Eligibility for using Free File software depends on how much money you make. The IRS sets this eligibility amount, and it may change year by year. Bonus – you can use this program to file both federal and state tax returns.
If you’re not eligible to use Free File software because you earn too much, you can still use the Free File forms to submit your federal taxes.
When using Free File software to save money on filing your tax returns, you need to start at the IRS website. Links from the website will take you to software providers the IRS has approved. This guarantees that you won’t be charged for doing your own tax returns.
Doing your tax returns through the IRS site also helps protect you from fraudulent tax schemes and scams.
How to Decide if You Should File Your Own Tax Returns
Filing your own tax returns may not be as hard as you think. But with most things in life, the final decision comes down to, you guessed it, money. Deciding to file your tax returns for free depends on your financial situation.
Usually, if your only income for the year is from your job and you’ve had no major life changes in the past year, you can save money doing your own tax returns. What are these special life changes? Life changes are things like getting married, divorced, having a baby, or buying a house. These all change your financial profile in a huge way.
Your tax situation will be less clear if you are self-employed, had life changes, made a lot of investments, or applied for bankruptcy in the previous year. In these cases, you should get advice from an accountant on the best way to file your tax returns. So the simpler your situation, the more likely it is that you can use the IRS free file programs.
The US Government website has tax-return advice on how to prepare income tax returns if your financial situation is complex. Self-employed people, newlyweds, and first-time home buyers take note.
Advantages of Filing Your Own Taxes
What are the benefits of using IRS tax programs to E-file your taxes?
1. Saves you money
If your financial situation is simple, you can save a lot of money filing your own taxes online. Using the IRS Free File tax program, you can save between $150 and $300 on filing your tax returns. Even if you don’t qualify for the Free File software program because you earn too much, you can still save money.
If your financial situation is more complex and you can’t use the free options, additional IRS tax programs may cost between $10 and $50.
2. The process is easy
For most people, the process of filing their own tax returns is easy. All you need is your 1040 and forms for your income and deductions from last year.
Remember that if you have had any life changes, your tax situation will be more complicated. If that is the case, it is best to get professional advice before deciding if E-filing is for you.
3. Can save you time
In many cases, it may just take an hour or two to E-file a simple tax return. Even if you have more documents to file, you will still be able to submit your tax returns faster. Usually, the months between January and March, known as the “tax season,” are when it’s hard to get time with a tax preparer.
So, filing your own taxes may mean that you get your refund faster.
4. You learn more about income taxes
Many people who file their own taxes find that they learn more about the tax system. While this may not sound fun to a lot of people, knowing how taxes work has many benefits.
For example, you will be more aware of the importance of saving money. Also, you may find ways to reduce your taxable income legally. After all, you know more about your lifestyle than your accountant.
Some ways to lower your tax bill and get the biggest return you can include:
- Put money in a 401(k) or IRA
- Donate to charity
- Add to your HSA
Advice on Using IRS Free File Tax Programs
There are many advantages to using Free File tax programs to submit your tax returns. A lot will depend on how you organize your tax documents throughout the year.
It is a good idea to have one place where you keep and file all your tax-related documents throughout the year, such as:
- A copy of your previous year’s tax return
- Information on income such as social security benefits, unemployment compensation, or investments
- All business-related receipts if you own and operate a small business
- Forms related to income such as W-2s and 1099s
- Bank statements
- Forms 1095A regarding health insurance and 8962 regarding premium tax credits
How Does Filing Your Own Taxes Work?
For most taxpayers, E-filing their tax returns is simple and easy. Once you have all your documents in hand, there are three steps to filing your tax returns online:
- Visit the IRS Free File website
- Choose the software that fits your situation
- When sent to the IRS partner’s website, enter your info into the tax prep software
When is it Best to Hire an Accountant?
For many taxpayers, hiring a tax preparer may be the best way to file their tax returns. So if you don’t like math, have started a new business, or had changes in your family, it makes sense to get an accountant. After all, you want to save as much money as you can on your taxes, and an accountant will help.
Bottom line? IRS free file tax programs to file your own taxes can save you money, get your return faster, and even save you some valuable time.