Tax Time. It’s a burden for everyone. Many people have questions about how to properly file their taxes, and it can get tricky if it’s your first time. Below are a few questions that are commonly asked by first timers.
Should I Hire Someone To Do Mine?
This is up to you. If you decide to do your own taxes, make sure you have enough time. According to the IRS, you will need at least 16 hours to devote to record keeping in order to complete Form 1060.
If you know what you’re doing, you will save a significant amount of time and money by doing them on your own.
You will want to consider hiring someone to do your taxes if:
- You’re not a numbers person.
- This is the first year your business is open.
- You’re unsure about tax laws.
- You’ve had a marriage, divorce, or a baby in the past year.
- You’ve changed your address.
- You’ve made new investments.
- You’ve made errors on your forms in past years.
What Documents Will I Need to Gather?
Gather the following items when you are ready to file your taxes:
- W-2 forms
- Last year’s return
- Bank account number & routing number (If you are depositing the return directly into your account)
- Pay stubs
- Mortgage payment stubs
- Home purchase closing statements
- Receipts for itemized deductions and charitable donations
- Income of other adults in your home
You will also want to have any records regarding payments to educational institutions, childcare payments and retirement income. If you are covered under the Affordable Care Act, you will need to fill out Form 1095-A if you enrolled through the exchange (healthcare.gov,) or fill out forms 1095-B and/or 1095-C if you are enrolled through a third-party source (employer, medicare, etc.)
How Can I File My Taxes Electronically?
There are a few different options depending on your income and ability to do taxes on your own.
I.R.S. Free File
If you know how to do your own taxes and make over $62,000, this method could save you time and money. Free File offers free, electronic versions of paper forms. Tax prep software and state returns are available for those who make under $62,000.
Commercial Tax Prep Software
If you choose to use your own commercial software, you can verify your identity with your self-select pin or Adjusted Gross Income from your 2015 tax return. Your return will be submitted through a secure channel and will be automatically checked for simple mistakes, like math errors or an incorrect Social Security Number.
Find an Authorized e-file Provider
The IRS website has a list of authorized e-File providers. Enter in your zip code to find one near you!
What Should I Do About Money Earned From Freelancing?
Freelancers often do not get taxes taken out of their paycheck. If you earn over $600, stick about 25 to 30 percent of your paycheck into a savings account to avoid extra fees. You should also file your taxes quarterly to avoid fees from the I.R.S.
I Forgot to Include Some of My Income on My Tax Return? Is It Too Late to Make Changes?
You will need to fill out IRS Form 1040X within three years after you originally filed your tax return, or two years after the date you paid them. Your form will be considered as filed on the due date, it will be considered as filed on Tax Day, April 18. On the 1040X form, make sure you indicate the year of your original return and explain why you are filing for an amended return in the “explanation of changes” section.
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