Wednesday, January 18, 2012

Useful Tips For Filing Taxes Online By Harold Dailey

There have been a lot of changes in the tax preparation and tax filing field over the past couple of decades. Today there are more options than ever when you need to fulfill your yearly obligation to the IRS. Some are free, some are not; some people do it themselves, others go to professionals. One thing does not change though, no matter which option you choose: you are liable for the accuracy of your report, no matter what.

In other words, if you go to someone for tax advice and/or assistance with filing your taxes, and that person is wrong, you are the one who will pay the penalty. The fact that they signed your return is irrelevant at this point. For this reason, many people opt to go the online route, because today's software does a fine job when it comes to navigating people through their returns.

You will obviously need a computer with an Internet connection, a tax filing program (software or e-file), applicable financial documents, and a couple hours. Some people master it faster than others, but it definitely is something that anyone can do if they set their minds to it.

Filing your taxes online has several advantages. It is more widespread than you think: even if you go to a professional, they are themselves more likely to use exactly that to file your return for you. Secondly, it is convenient: you do not have to bring anything to anyone, and you can get the job done in the comfort of your home. Finally, it is fast: not only is your information sent immediately, but your refund is also more likely to come quicker.

Now, when going through the process, one of the most important documents you will need is the W-2 form. Before you start filling anything, read the back and make sure you understand exactly what everything means. This is not one of those areas where mistakes have only minor consequences. Another practical suggestion is to print out everything you have filed, so you can have hard copies for your records. Remember that if you want to be on the safe side, you will want to keep them for seven years. Also, when filing online, you will receive a confirmation that the IRS has received your information; print that out as well.

Tax filing programs have now come to the point where they can analyze the information that you input and based on that information, pop-ups appear and suggest deductions that you may qualify for. Those programs are updated every year to take into account every change in tax law. This is one of the major perks of choosing that option.

Those looking for free options will be happy to learn that there are plenty of choices for them too. Most of this information will be on the IRS website, where they will find several options they have to file their taxes for free. Depending on your personal financial circumstances, you will likely find one that applies to you. For example, for those who qualify, there may be the IRS Volunteer Income Tax Assistance Program or VITA, and also the Tax Counseling for the Elderly program or TCE. Both of these services are free. Similarly, military personnel who need help filing their taxes can turn to the Armed Forces Tax Council or AFTC for free assistance. Active military member or their family are eligible.

In the end, the online option for filing taxes can help get rid of the stress that comes with potentially making a mistake on your return: the programs have error checkers and calculators built to help you minimize this possibility. Plus, there are many free options for those people who are cash-strapped. It is no wonder then that every year this method gains more and more popularity.

Harold Dailey is a finance fan. His recent tax related article, about IRS imputed interest rules, can be found on his website, The Personal Finance Blog.

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