When I was a 21-year-old newlywed, I couldn’t bear the thought of paying someone to do our simple taxes. So I went to the library, got the forms and did them myself. That was back in the days when you did taxes by hand using an adding machine. Today, with the many free and low-cost software options available to guide you through the process, doing your own taxes is a great idea for many people.
Of course, many taxpayers are nervous about doing their taxes wrong and avoid it completely. But there’s no reason to be afraid. Over the years I continued to do our taxes and other family members’ taxes, too. Sometimes I made mistakes, and when I did, I would get a letter from the Internal Revenue Service gently pointing out my mistake and either asking me for more money or sending me a bigger refund.
It’s not the end of the world if you make a mistake, so long as it’s a mistake made in good faith, rather than intentional fraud. The IRS simply lets you know what you did wrong and how much you owe or will receive. A small, honest mistake doesn’t generate an audit.
If you’ve never done your own taxes before, now is a great time to learn. It will help you understand what you pay in taxes and why. Even if you end up paying someone else to do them, the exercise of learning how to do your taxes will make you a better consumer when it comes to negotiating costs when working with a professional.
If you plan to do your own taxes, here are the key components you should consider:
If you need to buy software, you have several products to choose from, so make sure you do your research to determine which one is best for you.
If the amount you make (your adjusted gross income) is below certain amounts, you can access free tax software like FreeTaxUSA or the free versions of tax-prep software such as TurboTax, H&R Block and TaxAct. Additionally, depending on your age and income (for 2015 taxes, the income limit is generally $54,000), you may be able to use VITA, TCE or AARP free tax preparation, which is usually offered at the library or community center in your town. Of course, that would defeat your goal of doing your taxes yourself, but at least you wouldn’t have to pay to have them done.
Most paid versions of tax-prep software are full of great information and education that will guide you step by step through the process. If you have additional questions or don’t understand something, the IRS website is a great resource. Be sure to go to the government’s site,