How to File Your Taxes, According to Experts
Whether you hire a professional or do it yourself, it doesn't have to be a headache.
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OK, real talk: Is there anything more confusing than doing your taxes? It’s something we’ve all got to deal with, but the forms, the numbers, the terms—it can feel pretty overwhelming. And even though tax day 2020 was pushed back due to coronavirus (COVID-19), that doesn’t mean you have to wait until then to file. Regardless of if you choose to get them over with now or wait until the new date, it’s still probably in your best interest to be knowledgable about how to do them now, so you don’t get stressed out later.
For tips on how to file your taxes, whether you need a professional or not, plus all the forms and files you should have on-hand, we’re here with expert advice from financial pros on how to get it all done.
When are taxes due?
Typically, Tax Day is around mid-April. You can usually expect to have your employer mail you your W-2 forms towards the end of February in preparation for this. However, due to the spread of coronavirus and the motions taken by most states to social distance and have employees work from home, the IRS extended the deadline to file taxes from April 15th, 2020 to July 15th, 2020.
Do I need a professional to file taxes for me?
If you’re worried about the cost of hiring a tax pro, it can be a lot more tempting to just take care of your taxes on your own. Who needs a tax guy? You’ve got your laptop and your brain, after all!
But there really are some situations where it might be more beneficial to hire some help with filing your taxes, Richard Gartland, senior tax professional at H&R Block, tells HelloGiggles. “Do-it-yourself software and online tax programs select the appropriate forms and use everyday language, making tax law easier to understand,” he says.
“But assistance from a qualified tax professional can help put taxpayers of all income levels at ease. Ultimately, it is the taxpayer’s comfort level and personal preference that determine the best method.”
If you don’t know much about taxes, it could benefit you (and actually save you money in the long run!) to have a professional’s expertise, adds Melissa M. Labant, J.D., CPA/PFS, CFP, CGMA Director at AICPA Tax Policy & Advocacy.
“Frankly, it depends on your personal situation, your familiarity with tax laws and computer software programs, and your comfort with having to deal with an agent if the IRS comes knocking,” she tells HelloGiggles. “Don’t forget though, there is real value in sitting down and talking to a CPA about what impacts your tax liability and how you can save money on your taxes next year!”
Jennifer Barrett, chief education officer at Acorns and founding editor of Grow, a digital finance magazine for millennials, has this suggestion: “If all of your annual income comes from your full-time job, and you just have a few straightforward deductions plus some retirement savings, doing your own taxes should be pretty simple. If you are a homeowner or business owner, it might be worth considering getting expert help to ensure you’re taking all the deductions you’re entitled to–and no more,” she says.
How much does it cost to have your taxes done by a professional?
So you’ve decided to hire a tax guy or gal. It can seem overwhelming because figuring out how much you want to spend is yet another layer of stress on top of the tax craziness. You want quality advice, but you also don’t want to break the bank.
“Do your research,” Stephanie Gruenhagen, tax attorney at Davidoff Hutcher & Citron LLP, tells HelloGiggles. “It will depend on where you live and the complexity of your return.”
Suggestions from friends or family are a great option. Gruenhagen suggests finding reviews online of tax preparers in your area, and make sure to not only include big institutions like H&R Block, but also smaller companies, too. “Make sure you read reviews,” she adds. “Just because a place is big and services a lot of clients doesn’t mean that it is better than a solo accountant. The solo may focus more on your individual taxes instead of the volume of tax returns you can process.”
Just like you’d use the Internet to find a good hairdresser or restaurant, do your research.
What forms do I need to file my taxes?
Once you’ve chosen your perfect tax professional, you definitely don’t want to show up empty-handed. “You should have all of your income or expenses organized and documented,” Gruenhagen says.
That means your W-2 or 1099 (or any other form that shows income), any receipts you want to see if you can write off, the places you worked last year, where you lived, your Social Security number, proof of identification (like your driver’s license), basic info about any dependents you may have, and your bank account information. If there’s anything else you deem pertinent, bring it along just in case—better safe than sorry, right?
How do I file taxes on my own?
If you know a thing or two about taxes, and you think you’d be best off if you just did them yourself, then you may be wondering, which tax software is best?
Good news: You may not have to drop any money on one of those tax softwares at all, if you qualify.
“There are many software programs that people can use,” Eileen Sherr, CPA, CGMA, M.T. Senior Technical Manager at AICPA Tax Policy & Advocacy, tells HelloGiggles. “The IRS offers free-file and access to various software programs for e-filing your federal tax return and many state returns if your income is below $62,000 and you qualify.”
However, there are also other programs you can use, such as TurboTax and TaxAct, that will help you get all this tax stuff over with (and with a little extra cash, too).
Though it seems overwhelming at first, these online tax tools will guide you through what you need. Plus, many of them will save your tax return for next year, so you don’t have to go digging around for paperwork when you get a new job or need them for next year.