The following information is not professional tax advice. I am sharing how our family files our taxes without paying a professional hundreds of dollars for tax preparation. Our taxes are not complicated, and we choose to use an on-line service while using time wisely.
Photograph Credit: Flickr (MoneyBlogNewz)
Filing our taxes last weekend took longer than I anticipated. Most years the filing takes between 1-2 hours total. This year was different since I needed to research the filing of Using Time Wisely along with our personal taxes.
After about 4-6 hours, I authorized the electronic filing and celebrated with a warm bath and Facebook time. 🙂
If you choose to file your own taxes but want the help of a tax service, then here’s my 5-step plan to go from pile of paperwork to filed taxes.
STEP ONE: Gather your Documents
Throughout the year, I toss all tax documents inside a labeled file folder. At tax time, I get the folder and begin. If you do not have a file or are not sure what documents you need, then use my list of documents I gather to start:
Income
- W-2 forms (from employers)
- IRS notices (1098, 1099R, etc.)
- Refund from 2010 state taxes
- Retirement documentation (income from conversions of a qualifying retirement account)
- Business accounting documentation
Deductions
- Mortgage interest forms
- Line of Credit interest forms
- Property tax receipts (vehicles, home, etc.)
- Charitable donations
Other
- Use tax receipts (items purchased via Internet without paying sales tax)
- Copy of 2010 federal tax return
These are the documents I gather. You may need more documentation (i.e., medical receipts, childcare expenses, tax preparation fees, etc.) to file your 2011 taxes.
STEP TWO: Choose a Tax Service
In an effort to save my family money, I choose to prepare our taxes. Up until last year, I filed our taxes by hand. Last year, I tried TaxAct and loved it! The federal filing for us was free, and I paid $14.95 for our state filing.
Paying less than $20 for the same tax preparations that a professional would charge $250 was beneficial to our family while stretching our dollars.
This year, TaxAct sent me a promotion for the deluxe package which included the federal and state tax filing for $13.95 which I purchased. Having used the on-line service last year, I was familiar with the steps, and some of our information transferred to our 2011 return. Yeah! This service continues to save me money, energy, and time!
If you are looking for an on-line service, you may qualify for free federal tax preparation through these available companies. Though the federal filing is free, these companies charge a fee for the state filing.
STEP THREE: Search for Promotional Codes
Once you decide which company you prefer, search for a promotional code through your favorite search engine (e.g., Swagbucks, Google, etc.). To search, type the “[name of the business] promotional code” (e.g., “TaxAct promotional code”) into the search box.
If you find none, try the company’s web site, scan the banners and advertisements on the home page, and check the pricing page. You might be surprised at the savings found with a quick search.
STEP FOUR: Register at your Chosen Company
If you are filing with a new-to-you company, you will need to set up your account. This process takes a few minutes.
Note: Remember to record your user name and password to get access to your account after periods of inactivity and next year.
TaxAct timed out 3-4 times during my preparation while I researched, added our receipts, and checked forms.
STEP FIVE: Add Amounts, Review, and File
Add Amounts
Once you register, you are ready to begin. The service will ask you questions and offer blocks for you to add the amounts from your documentation. With your documents gathered, this process goes quickly.
Review
When all information gets entered, review and run the alerts. The service will alert you to any inconsistencies, missing information, or problems.
File
Once you have reviewed your federal return and verified the information, you can choose to e-file or mail your return. You will want to save a copy of your return. I choose to save it to my computer and print a hardcopy for our records.
Once filed, you should receive a confirmation notice. I print this notice for our records.
State Tax Filing
For our state return, TaxAct transferred our federal return information to our state forms. Within 15 minutes, I added two other amounts, reviewed, and filed our state taxes. (Insert happy dance!)
Though there are tons of other things you would rather do than file taxes, you can gather your documents, choose a tax service, search for promotional codes, register your account, and add amounts, review, and file your taxes while using time wisely.
You still have a little over a week, but why wait. Knock out those taxes, cross another item off your to-do list, and save your family $200 or more by filing your taxes through a reputable tax service. You can do it! Just start at step one. Happy savings!
Question: How do you file your taxes?
