Filing your taxes yourself doesn't have to be difficult. If you follow these steps and file via a user-friendly tax software, you can complete your returns quickly. But doing taxes alone on paper can be overwhelming, so get some extra help from TaxAct. Get 25% off* TaxAct services and start your 2020 tax returns today.
As a general rule, if you're planning to claim the standard deduction, there's really no reason to hire someone to prepare your tax return. All you need to do in that case is list your income from your W-2 and 1099 forms and see where that takes you.
You might think completing and filing your own income tax return would be more difficult than handing everything over to a paid tax preparer. But with the right approach, and a few simple tips, you can learn how to do your own taxes — and save yourself some time and money to boot.
The IRS says they spend 13 hours preparing their returns, with six hours of the total used for recordkeeping and two hours for tax planning. Taxpayers with their own businesses spend far more time on tax preparation than nonbusiness taxpayers.
IRS Free File lets you prepare and file your federal income tax online using guided tax preparation, at an IRS partner site or Free File Fillable Forms. It's safe, easy and no cost to you for a federal return.
The case for doing your own taxes
All you have to do is complete the basic personal and tax questions and transfer the numbers from your W-2 to your tax return to determine how much you owe or receive as a refund. Filing online makes the process easier and helps you to avoid the most common filing mistakes.
If you fail to file your taxes on time, you'll likely encounter what's called a Failure to File Penalty. The penalty for failing to file represents 5% of your unpaid tax liability for each month your return is late, up to 25% of your total unpaid taxes. If you're due a refund, there's no penalty for failure to file.
Minimum income to file taxes
Single filing status: $12,550 if under age 65. $14,250 if age 65 or older.
Politics compounds complexity. Interest groups—and thus politicians—support tax subsidies for particular activities. And these targeted subsidies inevitably complicate the tax system by creating distinctions among taxpayers with different sources and uses of income.
The complexity of these cases means that using a professional tax preparer can save time, reduce stress, avoid DIY errors, and potentially uncover tax savings that even the best tax software might not surface.
If you earn less than $10,000 per year, you don't have to file a tax return. However, you won't receive an Earned-Income Tax Credit refund unless you do file.
Depending on what amount of income and which credits you specify on the W-4, the more or less tax will be withheld. Having less taken out will give you bigger paychecks, but a smaller tax refund (or potentially no tax refund or a tax bill at the end of the year).
Income under $500. —A single person with less than $500 income should file a return to get a refund if tax was withheld. A married person with less than $500 income should always file a joint return with husband or wife to get the lesser tax or larger refund for the couple.
In general, no, you cannot go to jail for owing the IRS. Back taxes are a surprisingly common occurrence. In fact, according to 2018 data, 14 million Americans were behind on their taxes, with a combined value of $131 billion!
If you continually ignore your taxes, you may have more than fees to deal with. The IRS could take action such as filing a notice of a federal tax lien (a claim to your property), actually seizing your property, making you forfeit your refund or revoking your passport.
The average cost for a basic tax form preparation is about $220. That fee covers a standard 1040 and state return with no itemized deductions. But don't run off with that number just yet. Taxes shouldn't be this complicated.
TurboTax Free Edition: $0 Federal + $0 State + $0 To File offer is available for simple tax returns only with TurboTax Free Edition. 100% Accurate Calculations Guarantee: If you pay an IRS or state penalty or interest because of a TurboTax calculation error, we'll pay you the penalty and interest.
Satisfaction Guaranteed: You may use TurboTax Online without charge up to the point you decide to print or electronically file your tax return.
Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns. However, tax professionals have differing levels of skills, education and expertise.