Do you look forward to your annual tax-filing duties?
The truth is that Americans universally dread the task. Just how much anxiety it evokes might depend on how you decide to complete your filing responsibilities.
You basically have two choices: Do your taxes yourself or turn the task over to a professional. But even if you do the latter, you still have to do most of the prep work yourself.
Each option requires some additional considerations.
Before you start, ask yourself some important questions:
Ways to self-file
- Are you generally familiar with your tax situation? For example, do you know your filing status, understand what tax breaks (credits and deductions) you are eligible to claim and follow tax law changes enough to know what changes might affect you?
- Are you comfortable doing research if you encounter a tax question with which you're not familiar?
- Are you organized? Do you keep good records to help you complete the forms?
- Do you prefer that no one else see your personal and financial details?
If you answered "yes" to these questions, doing your taxes yourself shouldn't be too much of a problem.
Ways to self-file
Once you do choose self-filing, then you have a few more choices to make.
You can file the old-fashioned way, mailing in a paper 1040 and necessary schedules that you filled out by hand.
You can use computer software that you load onto your PC or access directly online. The major vendors are TurboTax and TaxCut, but several smaller manufacturers offer filing programs. As with any consumer purchase, comparison shopping will help you find the tax software that best meets your needs at the price you are willing to pay.
Even if you use tax software, you still can print out your tax return and mail it to the IRS.
However, many people who use software also file electronically. They (and the IRS) find this method to be quicker and, if you are getting a refund, your return will be processed sooner.
If you file electronically, check on whether you might be able to do so for free. The Free File Alliance, a partnership of the IRS and tax software manufacturers, allows many taxpayers to e-file at no cost. The criteria changes slightly each year. Check the Free File Web page in January for details on the current eligibility guidelines.