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How to Do Your Taxes at Home

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SmartAsset: How to Do Your Taxes at Home

There are several good reasons to consider filing your tax return yourself. It can be cheaper than putting everything in the hands of a professional. You’ll learn how to lower your tax bill and you’ll be able to crunch the numbers in the comfort of your own home. If you’d prefer a DIY approach at tax time, taking the following steps can make the process go more smoothly.

If you prefer a hands-on approach, a financial advisor can help optimize your financial plan to lower your tax liability. 

1. Find Out Which Forms You Need to File

The first step to doing your taxes is figuring out which paperwork you’ll need to complete. If you’re a regular employee, you’ll file Form 1040.

Self-employed people and others who pay estimated taxes will need to submit tax form 1040-ES. Additional forms that you need will depend on whether you’re itemizing your deductions (Schedule A) or listing capital gains and losses (Schedule D), for example. There are also forms you can fill out to account for tax breaks, special circumstances and other earnings, like gambling winnings.

2. Choose the Right Tax Software

SmartAsset: How to Do Your Taxes at Home

Looking at the tax forms you’ll be required to submit will give you a sense of how difficult tax filing will be. From there, you can pick the tax software (like TurboTax or H&R Block) that will best meet your needs.

If you don’t mind waiting a while to get your tax refund, you can send paper forms to the IRS through the mail. Otherwise, you can look into using one of the online tax programs. There are quite a few to choose from. Some are entirely free while others have some free features but charge fees for everything else.

Don’t have time to compare and contrast tax software? You can settle for the IRS Free File Program. It allows you to file your federal income tax return (and possibly your state tax return) free of charge.

3. Get Organized

Before you get started on your tax forms, it’s a good idea to collect everything you’ll need during the process. That includes documents like your W-2 form, old tax returns, your dependents’ Social Security numbers and credit card statements if you’re a business owner. If you plan to claim any deductions, you’ll need bank statements and receipts as proof that you’re eligible for those tax breaks.

Related Article: Tax Prep Checklist – What Your Accountant Needs to Prepare Your Taxes

4. Get Familiar With Tax Terms and Rules

For anyone filing a tax return for the very first time, it might be wise to familiarize yourself with some of the language you’ll see on tax forms. Doing your taxes will already take up a big chunk of your time. But filling out all the paperwork could take a lot longer if you don’t know what an exemption is or you don’t understand the difference between credits and deductions.

It’s also important to read up on the tax laws that could affect you. You don’t want to run the risk of getting audited by the IRS because you claimed an expired tax credit or you tried to get an extra deduction by over-contributing to a retirement account.

5. Figure Out Which Tax Breaks You Qualify for

SmartAsset: How to Do Your Taxes at Home

Speaking of tax credits and tax deductions, you’ll need to find out which ones you’re allowed to claim. The IRS has an updated list of available tax breaks. You might be able to get a tax credit for your childcare expenses or a deduction for giving to charity.

Additionally, you’ll need to decide whether to itemize your deductions or take the standard deduction. Claiming the standard deduction is the easiest thing to do. For tax year 2024, the standard deduction is $14,600 for filers who are single or married but file separate returns (up from $13,850 in 2023). The standard deduction is $29,200 for married couples filing jointly and $21,900 for heads of household (up from $27,700 and $20,800 in 2023, respectively).

Listing all of your deductions and adding them up, however, might be a better way to reduce your tax burden, particularly if you have a high income.

6. Review Before You File

Once you start working on your tax forms, you’ll need to follow the instructions on your paper forms or pay close attention as your online tax software walks you through everything. Even if you’re confident that you did your math right, it’s best to give each form a second look in case you made a mistake.

Related Article: Tax Filing: DIY or Hire a Professional?

7. Seek Assistance When Necessary

Even if you’re working on your tax returns and forms at home, you can run the numbers by a tax professional later on. There are community-based tax assistance centers you can go to for help. Plus, the IRS offers an Interactive Tax Assistant that can answer any questions you might have.

Bottom Line

Doing your taxes at home can save you money and give you more insight into your own financial situation. If you adequately prepare yourself, you might find that filing taxes isn’t as dreadful as everyone says it is.

Tips to File Taxes

  • A financial advisor can help you develop a tax strategy for your financial plan. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • SmartAsset’s tax return calculator can help you figure out whether you’ll be getting a refund or owe the government money.

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