Get Ready for Tax Season
How do you feel when tax season rolls around? Confident? Stressed? Maybe confused? Whether you’ve just started paying taxes for the first time or you’ve been doing it for years, tax season can be tricky to navigate. That’s why we’re here to help. While we’re not tax experts, we have some information to help you get through tax season. We’ll break down the tax process for you, making sure that you have your taxes and finances in top shape by April 15th.
Just a quick note–as we mentioned before, we’re not tax professionals. If you have specific questions or concerns when it comes to your taxes, consult with a tax expert.
Tax Basics
Let’s start with the basics. Firstly, are you even eligible to file for taxes? According to the 2021 filing requirements, if your filing status is single, you’re younger than 65 and you made at least $12,250, you meet the filing requirements. In a nutshell: if you meet those requirements, you have to file taxes.
The federal tax deadline is usually on or around April 15 every year. But if you have to file for an extension, the extension deadline is October 15. And since the government requires all tax information to be postmarked by January 31, you should get all the tax information you need by February.
What You’ll Need
As soon as tax season starts, it’s time to gather all the documents and information that you’ll need. While it on the person and their situation, here are some documents that are commonly needed to file taxes:
- W-2s: This document reports wages from employers.
- 1099s: This will report income from contract work, royalties and rents, unemployment, interest, dividends, retirement distribution and other sources.
- 1099-Cs: This reports forgiven debt, which the IRS considers income in many instances.
- 1098s: This indicates payments that may be tax-deductible.
Personal Information
In addition to important tax documents, you’ll be required to provide some personal information when you’re filing your taxes, too. Here’s what you’ll need:
- Social security number
- Home address
- Date of birth
- Bank account number and routing number
How to File Your Taxes
Now that we’ve got the basics down, let’s move to the most important part of tax season: actually filing your taxes. Depending on your level of experience with taxes, there are a few ways you can go about this.
File Your Taxes Yourself
If you’re comfortable and have experience with taxes, you can definitely file your taxes on your own. Does that sound daunting? Don’t worry–there’s plenty of free tax filing software that can help you out.
This is a great option for those who have some tax experience and who don’t have anything too complicated to worry about with their taxes. But if your taxes have a lot of complications and nuances or if you’ve never filed your taxes before, you might need a little extra help.
Use More Comprehensive Tax Software
While the higher-quality tax software typically costs money, it might be worth it if you’ve never done your taxes before or if your taxes are a little more complicated. A lot of higher-end tax services offer a lot more support than free tax services. They typically offer advanced software that can help you navigate complex tax forms, as well as tax deductions and exemptions. Some services can even help you complete your personal and business taxes.
Here are some tax services you might find helpful:
- TaxSlayer: This tax software offers affordable options for federal and state, with standard support you’d expect from pricier software.
- TurboTax: This one’s a huge fan favorite because of its authority reputation. If you’re already using Intuit products, you’ll likely like TurboTax.
- FreeTaxUSA: If you’re looking for an easy, free option for filing your federal return, FreeTaxUSA is a great option. Its state returns are also very affordable.
- Liberty Tax: Liberty Tax partners with lenders to make tax refund loans available for those who use this service. If you can’t wait for your tax refund, this might be a great choice.
Work with a Tax Professional
Using tax software is convenient, especially if your taxes aren’t too complicated. But if you need a little help navigating your taxes, you might want to work with a tax professional.
A tax professional can take all the stress out of tax season and they’ll save you a ton of time by doing your taxes themselves. Plus, tax professionals are able to add a human touch that tax software can’t. They can make suggestions and offer their expertise, all while keeping your financial situation and goals in mind.
Do Taxes Affect Your Finances?
Now that we’ve covered the basics, you might wonder: does filing taxes affect your finances? The short answer? It depends. You might find that you owe taxes during one tax season. On the other hand, you might not owe any taxes. In that case, you’ll most likely just receive your tax refund.
If you’re worried that filing taxes will negatively impact you or your finances, we have a quick tip: don’t lie on your taxes to get more money. It might be tempting, but the IRS finds you guilty of tax evasion or tax fraud, you could go to jail.
Taxes and Your Finances
Are you nervous about tax season? Don’t be: there are plenty of free and low-cost options that can help you navigate your taxes. Plus, using tax software or a tax professional can help ensure that your tax season is pain-free. So don’t worry—as long as you’re careful and thorough, you shouldn’t have any problems this tax season.
