5 Things To Remember When Doing Your Own Taxes

This post is part of the TaxAct #DIYtaxes blog tour which empowers you to take ownership of your finances by doing your own taxes. TaxAct provides the tools and guidance to help you confidently file your taxes easy and fast. Do your own taxes today at TaxAct.com. You got this.

I‘ve been doing my own taxes ever since the early 1990s when I got my first job pushing carts in the grocery store parking lot in high school.

Oh how things have changed.

Back in those days filing your own taxes was a completely different process from what it is today.  You would have to get your paper tax forms from the post office or other location, fill them out by hand, and mail them in.  All the math calculations had to be done by hand or with a calculator.  When you were done, if you were careful, you’d have to go through all of your numbers a second or third time to make sure that you had all of your numbers right.

These days doing your own taxes is a much simpler process. You can file your taxes online using a software like TaxAct all within an afternoon, submit it electronically and have a refund within a short time frame.

Even though the process is easier these days, there are still things that you need to remember when doing your own taxes. Here are a few of the most important.

Do-It-Yourself Taxes: 5 Things To Remember

One of the main reasons I’ve done my own taxes over the years, is the fact that it’s so much cheaper than hiring someone.

According to the National Society of Accountants, for an itemized Form 1040 with Schedule A and a state tax return, you can expect to pay a professional about $273 (source).  You can add on another $174 if you have to prepare a schedule C like I do.

By doing it myself I can save hundreds of dollars. I don’t think I’ve ever paid more than $100 to do my taxes, even though they’re a bit more complicated than the average person’s.

If you have a simple tax situation, doing your taxes shouldn’t be all that hard, and can be done in a couple of hours on a weekend.  Also, if you meet certain criteria it could even be free if you are filing a 1040EZ.

If you do decide to do your own taxes, there are a few important things that you should keep in mind.

• Make sure that you stay organized: One of the most important things to stay on top of whether you’re filing your own taxes or not – is to make sure you have all of the necessary paperwork that you’ll need when it comes time to file. This is especially important if you are going to itemize your deductions. You’ll want to have not only your personal information including social security number for you and your loved ones, but also your tax returns for the past couple of years, bank accounts, W-2 forms from your employer, 1099-MISC forms, 1099-INT forms, various deductions for mortgage interest, student loans and more. Keep all of your information in one place as you go throughout the year, so that it’s all ready to go come tax time.
• Make sure to file early so you’re not in a rush:  It’s important to file your taxes as early in the year as you can. Why? By filing early you can get your tax refund as soon as possible (if you’re expecting one), avoid mistakes made in the rush to file at the last minute, and also help yourself to avoid tax fraud. There has been a rash of tax related identity theft crime recently.  I would have thought this was a minimal risk up until this year when someone tried to file taxes using my name and Social Security number.  Thankfully the IRS caught the fraudulent return in my case and didn’t process it, but you can avoid having these issues if you just file early in the year before the scammers do.
• Remember to take advantage of all available tax credits and tax deductions: When filing your own taxes, make sure to take advantage of all the money saving deductions and credits that may be available to you. Whether it’s gifts to charity, points paid when refinancing your mortgage, medical and dental expenses, education expenses or energy saving home improvements, there are a million and one credits you might not even be aware of.  Thankfully if you’re using a software like TaxAct, they’ll bring most of these to your attention.
• Choose a software that fits your needs:  When filing your own taxes you can certainly file a paper form if you want to, but personally I prefer to use a tax software. When choosing the software you’re going to purchase, make sure you know how what’s included, and whether or not you’ll need to pay extra for filing state taxes, or if you’ll need extra forms beyond just the 1040EZ.  If you do, you may need to buy an upgraded version of the software.  Figure out what your needs are, and then choose your software that best fits your situation.
• Take the time to double check your work:  After you’ve taken the time to enter all of your W2s, 1099s and everything else into your tax software, take the time to double check your work.  I know I’ve made mistakes more than once in the past, and it’s usually because I didn’t take the time to be extra thorough.  Go through your taxes and make sure you’ve completed every form, deduction worksheet and schedule.

Doing your own taxes can feel like a daunting project to take on, but if you stay organized, file early and take advantage of a good tax software, you’ll find it’s not as hard as you might have thought.

Do you typically file your own taxes? What are some benefits to filing your own taxes?

Beating the tax deadline doesn’t have to be stressful. With TaxAct, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple federal and state return FREE today with TaxAct