Do Your Own Taxes

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We are just a few days away from the deadline to file our tax returns. If you haven’t filed your tax return, you better hurry or file for an extension.

I have been doing my own taxes for over 15+ years now. It is not as scary as it sounds – it is fairly easy to do your own taxes. I have a regular day job and receive W2 from my employer and 1099’s from banks and brokerages.

The only thing left is deductions – you could go with the standard deduction or itemize your deductions.

I use the itemized deductions because it helps lower my tax bill.

If you are not running a business, and you fall into the description above, it is fairly easy to do your own taxes.

 

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For a lot of people, fear gets in the way.

Speaking of fear, there are two kinds – rational fear and irrational fear.

I can offer some help on the rational fears, however, I don’t have anything up my sleeve for irrational ones.

The main reason I hear from my own family and friends for not doing their own taxes goes like this –

#1 “I ‘m afraid I might mess it up.

#2 “I don’t want to deal with the IRS directly should I get audited.”

These two fears are rational in nature. The good news is these can be addressed.

Popular tax software like Turbo Tax and TaxAct ask you questions all along the way – all you got to do is answer questions and fill in the information. These popular software have checks and balances in place – you really need to work hard at messing it up. This should help address the first fear.

The second fear is the fear to deal directly with IRS should you be audited or if IRS has a question for you. Most tax software publishers offer some sort of audit defense or shield program.

You could sign up for it and you would never have to talk to IRS directly. If you sign up for the audit protection program, the software provider would represent you.

 

Learning to Do Your Taxes

Just like anything, it takes a little bit of learning. If have always been going to an accountant to do your taxes, the best way to get started is to do your own taxes, then take it to the accountant, and have him / her review it.

If he / she determines that what you have done is correct, then you could do it yourself the following year.

 

Accountant Cost

While filing tax returns is not the most exciting thing to do, it needs to get done every year whether you like it or not.

The primary reason to do your own taxes is to save money.

If you go to an accountant, you are going to be paying somewhere between $200 – $300 or more to do your tax return. If you do your own taxes, you could be filing your tax return for $100 or less.

You save $100 or more by doing it yourself.

 

Tax Software Options

For the pricing mentioned below, taxes must be filed electronically.
TaxAct Free – $0 Federal + $0 State tax filing! – this is the lowest cost option I could find. For simple tax returns, you pay $0. The $0 state tax filing offer ends 04/14, so act fast to take advantage while this offer exists.

E-file.com – If you are filing just a 1040EZ, then federal return can be electronically filed for free. For state, you could file the return for $19 if you use coupon code SAVE24.

E.Smart tax by Liberty Tax – if you are filing just a 1040EZ, then federal return can be electronically filed for free. For state, you could file the return for $31.95. Get 30% off Liberty Tax Filing. Just click through this link to LibertyTax.com!

TurboTax – if you are filing just a 1040EZ, then federal return can be electronically filed for free. For state, you could file the return for $29.99.

 

My Opinion

I have been using TurboTax for several years now. I am very used to it and have been very satisfied with their customer support.

You need to select one that best suits your need. Once you choose a software, just stay with it for subsequent years. This helps you import a lot of information in from a previous year’s return. This saves you a lot of time.

I encourage you to consider doing your own taxes and save some money!

 

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6 thoughts on “Do Your Own Taxes”

    1. Hi Alexis,

      Welcome to Stretch A Dime! I am glad to see that you are doing your own taxes. Yes, you are right, DIY tax websites and software so easy to use and you save a lot of money taking that route.

      Hope to see more of you here.

      –Michael

  1. Our son does the taxes for us here in Canada.
    He uses Turbo Tax and it is a good program .
    It always worked out really good.
    I am happy he is doing this because it is
    something I do not like at all . I Germany I
    Had somebody doing taxes for my business, there
    it is much more complicated .
    Good post and good to be able to do your own taxes.
    Thank you
    Erika

    1. Hi Erika,

      Thank you! Yes, TurboTax is great!

      It couldn’t get any better for you – you have got TurboTax and you have your son doing your taxed for you :).

      –Michael

  2. I lived and worked first in a country where the taxes was done by employer, I never knew about it. Then I moved to another country where I did myself the taxes. As a note, it needs time and organisation – so I started to have an appreciation for accountants. The fear of doing something wrong follows me even I though I have been doing my own taxes over the past 5 years. But I started to learn what I can deduct and to use this to my advantage!

    In addition, I am thinking of offering my support and services to do taxes for people around me for money, of course.

    1. Hi Claudia,

      If my employer did my taxes for free, I would gladly take that up :).

      Yes, I am paranoid about triple checking my work when I am doing my taxes – the fear that you might do something wrong actually works in your favor. It makes you check your work before you file your taxes.

      You touched fantastic point – as you file your taxes, you learn – what you learn is how you can maximize your deductions. Not only do you save money by doing your own taxes, you also learn what steps you could be taking to maximize your deductions and minimize your tax bill.

      –Michael

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