Spring can inspire a renewed sense of confidence and optimism in do-it-yourself activities. For nearly 40 percent of Americans, this includes preparing and e-filing their own income tax return. Like most things DIY, following a few simple strategies can save you valuable time and money at tax time.
"First, gather all your tax forms and information, especially if you want to start and file your return in one fell swoop," says TaxAct Spokesperson Jessi Dolmage. "In addition to tax forms like W-2s, 1099s and 1098s, remember documentation related to income, investments and any expenses you think could be deductible. It's also a good idea to have a copy of last year's return for comparison."
When choosing your digital tax solution, carefully review the tax forms and situations covered. Although one brand may include the tax forms for homeowners and self-employed in its free or deluxe product, another may require you to upgrade to a pricey version for the same forms. Also take note of any fees for state returns.
If you're new to digital tax filing or switching brands, take a couple for a test drive. Paid solutions typically don't require payment until you file and some even allow you to try without creating an account. As part of your test drive, review the help resources. Most brands offer email, phone and chat but the tax and technical help in the program should be robust enough to answer most questions on the spot. Are the answers easy to find and easy to understand?
Regardless of the brand or product, take advantage of the interview and answer questions in the order they're asked. "The IRS doesn't tell you if you forgot to claim a refundable credit," says Dolmage, "but solutions like TaxAct will. The interview covers hundreds of credits and deductions in an efficient manner while checking your return for errors."
Once you've completed the interview and you are ready to file, print and review your return for these common mistakes:
- Incorrect social security numbers.
- Misspelled names. Be sure the names on your return appear exactly as they do on Social Security cards.
- Forgotten dependents.
- Inaccurate bank account and routing numbers for direct deposited refunds or electronic tax payments.
An easy way to avoid errors like these is to import last year's return. Top brands will import data the IRS requires to match last year's return, even if the return was prepared by another brand.
Additional tips for peace of mind
- Start sooner rather than later. Rushing can lead to costly mistakes. DIY solutions save your information along the way so you can start and stop at any time. If you experienced major life changes last year, allow some extra time to make sure you reap all the associated tax benefits.
- Delaying the inevitable because you owe? You can still file your return now and schedule electronic payment anytime by April 15.
- E-file. It's the fastest, securest way to submit your tax return and you'll receive electronic confirmation when your IRS return is processed.
- Choose direct deposit. With e-file, it's the fastest path to your refund. Otherwise, you may have to wait six to eight weeks for a check.
- Need more time? File IRS Form 4868 by April 15 for an automatic six-month filing extension. Just be sure to pay any taxes due by April 15 to avoid late payment interest and penalties.
Find more tax tips at www.irs.gov. Learn about TaxAct and file your federal taxes at www.TaxAct.com.