How to File Taxes Online
Gather financial documents., List your deductions., Calculate your adjusted gross income (AGI)., Consider hiring an accountant., Visit websites that allow you to file for free., Choose a low-fee filing service., Determine the package you need...
Step-by-Step Guide
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Step 1: Gather financial documents.
You should receive a W-2 form if you are employed and your employer withholds taxes from your paycheck.
You may also receive a 1099 form.
These information notices are sent for a variety of reasons: because you were paid for services provided as an independent contractor, you received interest or dividends, you received government payments (such as unemployment compensation), and you received withdrawals from a retirement account.
You should receive your financial forms by early February at the latest.
If you haven’t received them, follow up with your employer or those who hired you as a freelancer. -
Step 2: List your deductions.
You can take the standard deduction or itemize for deductible expenses.
For the 2015 tax year, the standard deduction will be $6,300 for those filing as single or married filing separately, or $12,600 for married filing jointly.
The standard deduction is required unless you have more than the allowed standard deduction amount in itemized deductions.
Allowable deductions may include home mortgage interest, state and local income taxes or sales tax (but not both), charitable contributions, unreimbursed medical expenses and employee business expenses, and real estate and personal property taxes., Since many free sites require that you have an income below a certain amount, you should roughly calculate your AGI before logging online.
To calculate, multiply your personal exemptions by $4,000.Then deduct your exemptions and standard or itemized deductions from your total income.
This will give you a rough estimate of your AGI. , If you can tell from simply estimating your AGI that preparing your taxes overwhelms you, an alternative is to hire an accountant in your area.
They will calculate your taxes for you, lifting a weight off your shoulders.
Accountants can also file your taxes online, thus getting you a refund faster.
The Voluntary Income Tax Assistance (VITA) program provides free tax preparation for those with incomes below $53,000.
The program is also available to those over 60, people with disabilities, and those with limited English.You can find a VITA near you by calling 1-888-227-7669. , The most popular is the IRS site.
You can visit the IRS website to learn about issues related to taxes.
The IRS offers a free filing program which you can use to prepare and file your taxes easily.
If your AGI is $60,000 or less, then you are eligible for this program.Myfreetaxes.com is another free filing system for those with an AGI below $60,000.
If your income is above $60,000, then consider online tax preparation services that may charge you a nominal fee. , If you do not qualify for free filing, then visit the more popular online filing systems that charge a fee.
There are many websites that offer online tax filing, which differ according to price. eSmartTax.com offers tax filing packages depending on complexity.
They offer tiers of service from free filings for 1040EZ up to $59.95 for more complicated returns (such as business filings).
Turbotax.com is the largest internet tax filing service and incredibly reliable.
It offers easy-to-follow instructions as well as information importing, allowing you to import your tax information directly to their site.
The most basic package allows for free filings of the 1040EZ.
The Premier service costs $79.99.
Hrblock.com is the second largest internet tax filing system after TurboTax, and is equally helpful.
They offer a basic package for $39.99. , If you are a wage-earner whose employer withholds taxes, then you should look at Basic packages.
Those who freelance and receive 1099 forms should pursue the Deluxe, or other mid-tier, packages.
Filers with real estate investments and capital gains or losses should use the Premier, or higher-tier, packages. , Most online filing systems will also file your state taxes, but a separate fee may apply.
With the H & R Block free package, a state filing will cost an additional $29.99.
TurboTax charges the same as H & R Block for each state filing. , Waiting until the last minute can cause you to rush and make errors.
Give yourself sufficient time to gather your tax information.
There are many advantages to filing early.
You not only can access your refund quicker, but you give yourself more time to correct errors.Also, filing early may prevent identity theft.
Identity thieves file false tax returns using stolen information.
They also try to file early, to beat the real taxpayer to the IRS.
Filing early yourself can prevent this., Each online tax filing program will give step-by-step directions explaining how to file your taxes online.
For example, Turbo Tax will guide you through most of the steps required by some of the forms.
It will also check for errors and provide you with an opportunity to fix them.
Double check all numbers and information to verify accuracy, as even a small discrepancy could trigger an audit.
Many online tax filing services offer live chat for help.
If you hit a snag, look into that option to receive help with completing your forms. , In addition to filing electronically, online filing services often give you the option to print your tax form and physically mail it in.
Some sites offer a 24 hour return, i.e., they send you the results of your tax return within one day of completing your forms, although there is usually an additional fee for this.
Be aware that nearing the end of tax-filing season, long lines at the post office can make mailing taxes time consuming. , If you file with the IRS, you should receive an explanation of why the tax return was rejected.Check for some of the more common errors:
You may have misspelled a name or entered your Social Security Number (SSN) wrong.
You may have tried to claim as a dependent someone whose SSN appears on another taxpayer’s filing as a dependent.If you are filing on the IRS website, contact them at 800-829-1040 with questions.
Other tax preparation services should provide the number to a help-line. , If you owe money, there are several options to pay.
You can pay with an electronic funds transfer, or with a credit or debit card.Payment with a credit or debit card carries a small convenience fee.You can also pay directly from your checking or savings account.You must have a valid Social Security Number or Taxpayer Identification Number to use this method of payment.
E-filers can also send in a check or money order.
Make the check payable to the “United States Treasury” and include on the face of the check your name, address, and daytime phone number.
Include a Form 1040-V payment voucher. -
Step 3: Calculate your adjusted gross income (AGI).
-
Step 4: Consider hiring an accountant.
-
Step 5: Visit websites that allow you to file for free.
-
Step 6: Choose a low-fee filing service.
-
Step 7: Determine the package you need.
-
Step 8: Remember to also file state taxes.
-
Step 9: Start early.
-
Step 10: Enter your information online.
-
Step 11: File your taxes.
-
Step 12: Troubleshoot any problems.
-
Step 13: Pay your taxes.
Detailed Guide
You should receive a W-2 form if you are employed and your employer withholds taxes from your paycheck.
You may also receive a 1099 form.
These information notices are sent for a variety of reasons: because you were paid for services provided as an independent contractor, you received interest or dividends, you received government payments (such as unemployment compensation), and you received withdrawals from a retirement account.
You should receive your financial forms by early February at the latest.
If you haven’t received them, follow up with your employer or those who hired you as a freelancer.
You can take the standard deduction or itemize for deductible expenses.
For the 2015 tax year, the standard deduction will be $6,300 for those filing as single or married filing separately, or $12,600 for married filing jointly.
The standard deduction is required unless you have more than the allowed standard deduction amount in itemized deductions.
Allowable deductions may include home mortgage interest, state and local income taxes or sales tax (but not both), charitable contributions, unreimbursed medical expenses and employee business expenses, and real estate and personal property taxes., Since many free sites require that you have an income below a certain amount, you should roughly calculate your AGI before logging online.
To calculate, multiply your personal exemptions by $4,000.Then deduct your exemptions and standard or itemized deductions from your total income.
This will give you a rough estimate of your AGI. , If you can tell from simply estimating your AGI that preparing your taxes overwhelms you, an alternative is to hire an accountant in your area.
They will calculate your taxes for you, lifting a weight off your shoulders.
Accountants can also file your taxes online, thus getting you a refund faster.
The Voluntary Income Tax Assistance (VITA) program provides free tax preparation for those with incomes below $53,000.
The program is also available to those over 60, people with disabilities, and those with limited English.You can find a VITA near you by calling 1-888-227-7669. , The most popular is the IRS site.
You can visit the IRS website to learn about issues related to taxes.
The IRS offers a free filing program which you can use to prepare and file your taxes easily.
If your AGI is $60,000 or less, then you are eligible for this program.Myfreetaxes.com is another free filing system for those with an AGI below $60,000.
If your income is above $60,000, then consider online tax preparation services that may charge you a nominal fee. , If you do not qualify for free filing, then visit the more popular online filing systems that charge a fee.
There are many websites that offer online tax filing, which differ according to price. eSmartTax.com offers tax filing packages depending on complexity.
They offer tiers of service from free filings for 1040EZ up to $59.95 for more complicated returns (such as business filings).
Turbotax.com is the largest internet tax filing service and incredibly reliable.
It offers easy-to-follow instructions as well as information importing, allowing you to import your tax information directly to their site.
The most basic package allows for free filings of the 1040EZ.
The Premier service costs $79.99.
Hrblock.com is the second largest internet tax filing system after TurboTax, and is equally helpful.
They offer a basic package for $39.99. , If you are a wage-earner whose employer withholds taxes, then you should look at Basic packages.
Those who freelance and receive 1099 forms should pursue the Deluxe, or other mid-tier, packages.
Filers with real estate investments and capital gains or losses should use the Premier, or higher-tier, packages. , Most online filing systems will also file your state taxes, but a separate fee may apply.
With the H & R Block free package, a state filing will cost an additional $29.99.
TurboTax charges the same as H & R Block for each state filing. , Waiting until the last minute can cause you to rush and make errors.
Give yourself sufficient time to gather your tax information.
There are many advantages to filing early.
You not only can access your refund quicker, but you give yourself more time to correct errors.Also, filing early may prevent identity theft.
Identity thieves file false tax returns using stolen information.
They also try to file early, to beat the real taxpayer to the IRS.
Filing early yourself can prevent this., Each online tax filing program will give step-by-step directions explaining how to file your taxes online.
For example, Turbo Tax will guide you through most of the steps required by some of the forms.
It will also check for errors and provide you with an opportunity to fix them.
Double check all numbers and information to verify accuracy, as even a small discrepancy could trigger an audit.
Many online tax filing services offer live chat for help.
If you hit a snag, look into that option to receive help with completing your forms. , In addition to filing electronically, online filing services often give you the option to print your tax form and physically mail it in.
Some sites offer a 24 hour return, i.e., they send you the results of your tax return within one day of completing your forms, although there is usually an additional fee for this.
Be aware that nearing the end of tax-filing season, long lines at the post office can make mailing taxes time consuming. , If you file with the IRS, you should receive an explanation of why the tax return was rejected.Check for some of the more common errors:
You may have misspelled a name or entered your Social Security Number (SSN) wrong.
You may have tried to claim as a dependent someone whose SSN appears on another taxpayer’s filing as a dependent.If you are filing on the IRS website, contact them at 800-829-1040 with questions.
Other tax preparation services should provide the number to a help-line. , If you owe money, there are several options to pay.
You can pay with an electronic funds transfer, or with a credit or debit card.Payment with a credit or debit card carries a small convenience fee.You can also pay directly from your checking or savings account.You must have a valid Social Security Number or Taxpayer Identification Number to use this method of payment.
E-filers can also send in a check or money order.
Make the check payable to the “United States Treasury” and include on the face of the check your name, address, and daytime phone number.
Include a Form 1040-V payment voucher.
About the Author
Katherine Clark
Specializes in breaking down complex hobbies topics into simple steps.
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