7 Critical Facts About Itemizing And Using Free Filing ServicesPublished:
As tax season fast approaches, most of us are starting to consider our options when it comes to filing. With all the changes in tax laws and new technology, many of the new options can be confusing, particularly if you are thinking of filing your own taxes.
1. What Is The Deadline This Year For Filing My 2018 Return?
This year, the deadline for filing is April 15. With that deadline only a few months away, tax payers should start gathering information and considering some critical decisions, like taking the standard deduction or itemizing.
2. What Are My Options For Deductions?
Deductions are typically used to lower taxable income. This helps taxpayers get more money back from the government when they file their tax returns. These are the two most common options for deductions:
- Standard deductions. This option can decrease taxable income by allowing you to use a fixed dollar amount based upon filing status. The most regularly used statuses are filing as a single or filing jointly as a married couple.
- Itemized deductions. Let the user deduct a list of eligible expenses that they have accumulated throughout the year. These should be documented and listed on a Schedule A.
3. What Are The Standard Deductions?
According to the IRS, the standard deduction is $12,000 for both single filers, and married filers filing separately. For married filers filing jointly, the deduction is $24,000, and for heads of household the deduction is $18,000.
4. What Is The Best Option For Me?
When considering which option you should use for your own filing, you will need to consider which one of these can lead to a larger refund. Experts suggest that taxpayers who do not own homes and who are not claiming large allowable expenses, should usually use a standard deduction. Itemized deductions work best for filers who have work related expenses, home costs, donations, and other expenses they would like to deduct.
Filers should also consider doing some ball park calculations to add up their expenses and compare them with the standard deduction. As a savvy filer, it is best to know the bottom line and be able to do basic calculations on your own. However, if your expenses start to get confusing, or you have questions about what you can deduct, it is best to seek professional help.
5. Free Filing Might Be The Best Way For You To File
In the past when taxpayers were ready to file, they had two options, complete the forms on your own, or seek the assistance of an account/professional tax firm. Today we have many more options, including Free File directly through the IRS website.
This simple service allows you to prepare and file your federal individual income tax returns at no cost using IRS approved tax-preparation-and-filing software. Essentially, the IRS Free File website will do the hard work for you and even provide you with the forms you need.
Free File is a great tool for tax payers with simpler returns who do not want spend their hard earned cash to file taxes with tax Preparation Company. It can also be fast and easy if you already have your documents and you are ready to file now. Free File and all the related forms are available starting January 28. All you need to do is chick on the link here: File Taxes Online
6. Let The Buyer Beware
Many professional tax preparation companies now offer similar services for free or low cost filing. You should be aware that if you chose this option, there may be some critical limitations. When tax payers choose to file through a free filing service, many of the audit assistance guarantees may not apply. Additionally, questions about filing with the standard or itemized methods may be harder to obtain. It can also be easier to make mistakes when filers do their own returns.
7. Consider Seeing A Professional Even If You Do Not Decide To Use One To File
Seeing a professional tax preparer can be a helpful tool, even if you choose not to file with that company. In most instances, they will help you calculate the amount you owe and then give you the option of filing with them or filing on your own. Of course, they will not give you the forms that they have prepared if you decide to walk away, but the process can give you a treasure trove of valuable information that can help you if you opt for a free filing service instead.
Filing your taxes can be a stressful, and sometimes expensive process, but it doesn’t have to be. If you have a less complex return and feel confident that you do not need the assistance of a professional tax preparation company, consider using Free File or one of the other great low cost or free online tax preparation websites.