Filing for Nothing
For many of us it is that dreaded time of the year again, especially since most of us are seeing our hard earned dollars going toward these questionable wall street bailouts. Nevertheless, the tough part is the high fees that most of us pay just to get our tax return filed due to the complexity of the tax code. The average cost, per individual taxpayer, is $207 dollars for tax preparation alone not including the filing fee which is usually another $20. With most of us tighten our belts, we realize that is money could be put to better use; however, we have no choice but to file a tax return. With this in mind, Overindebted.com has prepared a comprehensive list of free programs to help you spend less and get more for your money this tax season:
- Take advantage of free tax preparation services. Low-income taxpayers and seniors may receive free help with their tax return through community organizations. A few of the programs available are:
- Volunteer Income Tax Assistance Program (VITA). Call 1.800.829.1040 to find a local site.
- AARP Tax-Aide for free in person tax help or call 1.888.227.7669.
- Free File-Roughly 70 percent of all taxpayers qualify for Free Files online do-it-yourself tax preparation. For more information go to IRS and click Free File.
- Military members qualify for free tax preparation from the Armed Services Tax Council at offices located at their installations.
- Lastly, contact the District Offices of the Internal Revenue Service at 800.829.1040
- Choose the Right 1040:
- 1040EZ— With this form the only other form you need is your W-2. No receipts, records, or schedule to attach.
- 1040A—This form is only slightly different from the 1040EZ, the 1040A allows you to claim limited deductions and credits, a $1500 for taxable interest limit, and allows you to claim dependants. Additionally, you can claim student loan interest, dependent care, certain childcare, and IRA contributions. Lastly, the 1040A still entitles you to the standard deduction, however it is substantially lower that the standard deduction on the 1040EZ.
- 1040—Welcome to the big leagues. This form is most use because people can reduce their tax burden by itemizing, rather than taking the standard deduction. For people with considerable deductable expenses, the form will be more rewarding that the 1040A or 1040EZ.
- Note: You can download these forms from the IRS website.
- Don’t pay to file electronically. This only cuts cost for the government. It cost $20 to e-file, yet to mail the return only cost .42 cents. Note: Professional tax preparer should not charge you a separate fee for electronic filing. This should be their cost of doing business.
- Try tax prep software-Most tax prep software is free to try, you only have to pay to e-file or print the return. Some of the leading online websites for tax preparation software are:
- Note: Use the one that make sense to you and helps you maximize your deductions.
- Forgo Fast Cash—Stay away from refund anticipation loans. These loans charge you exorbitant fees to borrow your own money. Beside you have done without this money for the entire year, with e-file you should have your money within two-weeks.
Tax Resources
- IRS—Download and print forms and publications.
- 1040.com
- Fairmark Press Tax Guide for Investors.
- Federation of Tax Administrator’s state tax resource list.
- Quicken.com
- Roth IRA information
- Tax and Accounting Sites Directory
- Tax Foundation