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 By now we've put enough information together to really help you get through your income taxes with a minimal amount of effort. With all of the electronic information available and software that supports income tax preparation, there really is no reason that 90% of Americans can't do their taxes themselves and feel secure that they've taken all of the deductions their entitled to.
That being said, we're going to provide you with tax help using a somewhat logical approach. The technique we'll use will follow along with the IRS Form 1040 and help you find the information you need to complete each of the major sections contained in your tax return.
Tax Preparation Help
Hopefully, by now you've decided to that it's possible for you to prepare your federal income taxes on your own. But you still need to figure out if you want to fill out the paper forms, use an eFile provider, or use one of the many tax preparation software packages out there. Both of these last two choices can be extremely helpful in putting your taxes together in a fast and efficient manner - and sometimes it's even free.
eFile Help
We suggest that you consider is using one of the many IRS eFile providers to help you prepare and file your taxes electronically. If you have an Internet connection, then all you need to do is figure out which provider's service offers you the best value and you're on your way.
In many instances, you may even qualify for free preparation of your tax forms - although there is sometimes a fee to eFile your return - especially if you file a state return. The "interview" technique these companies use has really been perfected over the last several years. The entire process is fast, simple and thorough.
Tax Preparation Software
If you're not comfortable using the assistance of an online provider, then a great second choice is to purchase tax preparation software that you can load on your home computer.
Using the same interview techniques as the eFile providers, the tax preparation software can quickly determine which sections of the federal tax code apply to your situation. When you've completed your taxes, you can either print out your tax forms and mail them to the IRS or file them with the IRS electronically.
Tax Paperwork Checklist
No matter how you decide to file your tax return, the one thing you can do to really help speed things up is to have all of the paperwork you need to complete the forms in front of you at the start. The recommended checklist from the IRS includes:
- W2 forms from all employers.
- Your 1090G if you've received a refund of state or local income taxes.
- Any 1090 form that you've received for dividends, income tax withholding, or other forms of income.
- Receipts for any itemized deductions you might be taking on Schedule A.
- Records and receipts for any other income or expense you think might affect your federal income tax liability.
- Social Security numbers for all dependents.
- Bank account numbers if you plan on getting a refund electronically or paying any tax due electronically.
Adjusted Gross Income
The first major milestone that most people reach without any problem is the Adjusted Gross Income - Line 36 on the Form 1040. Most taxpayers can quickly figure out their tax status and sources of income without the aid of software or a tax professional. However, once past the interest income associated with bank accounts, the tax law starts to get a little bit more complex.
Help with Capital Gains
One of the more complex subjects a taxpayer has to deal with is the calculation of capital gains tax. The tax law changed a couple of years ago and the tax implications for long and short-term capital gains is more complicated than it used to be. We've put together some information aimed at supporting taxpayers in this new area in our article on capital gains.
Student Loans and IRAs
Some of the other stumbling blocks you might encounter on your way to Line 36 deal with IRAs and student loans. The first article you should take a look at is on student loan interest expense, which details the tax implications of those types of loans. The second article is on IRA rules, which can help you figure out if you're eligible for an IRA that is tax deductible or tax deferred.
Taking Tax Deductions
For many of us the favorite part of completing our income taxes is figuring out the itemized tax deductions that we can legally take. Unless you're taking the standard deduction, you'll have to use IRS Schedule A to calculate the total deduction you can take.
The types of deductions you can take include Medical Expenses, Taxes and Interest Paid, Gifts to Charity, Casualty and Theft, Job and Miscellaneous expenses. Some of these expenses need to exceed a threshold point before you can take a deduction, but that's all spelled out in the article link above.
Figuring Tax Credits
There are roughly four types of tax credits that can apply to some taxpayers - Child Tax Credits, Dependent Care Credits, Earned Income, and Education. Our article on Tax Credits outlines the rules that apply to each type of credit and can help you figure out if you're eligible for a credit.
Alternative Minimum Tax
If you made over $75,000, then you should run through IRS Form 6251 just to make sure you are not subject to the alternative minimum tax. Once again, we have an entire article dedicated to the alternative minimum tax to help you figure out if there is a way to shelter yourself from paying this tax.
Finding Tax Forms
Finally, if you need help finding an income tax form, we've got a listing of over 100 tax forms that are indexed by the form number and the tax subject. For example, we can assist you in finding any of the 1040 forms or those dealing with specialized tax credits and expenses. We also have an article dedicated to exclusively to IRS Form 1040 that will allow you to figure out if you can keep things simple with the 1040EZ or you need to file the long form.
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