8 Steps to Filing Your Taxes Like a Pro

by | Feb 7, 2019

Adulting is hard and filing your own taxes is just one more thing to tackle. The upside? If you’ve been relying on your parents, or haven’t had to file before, this experience will be a big boost to your financial knowledge. While the tax code is no joke, if you follow these 8 steps, you’ll be well on your way to owning Tax Day (April 15, 2019).

Note:  This article assumes you’re filing personal income taxes. If you have a business where the financials don’t hit your personal return, check out this resource to get you started.

Get Organized

First and foremost — determine if you need to file. The IRS provides a tool where you can check. As a rule of thumb, if you earned any income in 2018, you should file in case you paid too much and are due a refund.

If you’re going to file, start preparing now. Even though the tax deadline is more than two months away, it can easily sneak up on you. Start by using this checklist to gather all of the information that you’ll need. You’ll also need to know if your parents are claiming you as a dependent. If they are, your standard deduction will be reduced.

Learn Some Basics

You don’t have to bookmark the IRS website, but knowing some key tax terms will empower you and help you understand the process better. Here’s a master list of terms, explained using easy to understand language. You should also read up on recent tax reform to see what’s new this filing season.

Decide How to File

Paper tax forms are still available if that’s your style. However, the fastest way to get your refund is to e-file and have your money sent via direct deposit. There are many reputable websites that make the process a snap like TurboTax, H&R Block, or Credit Karma, to name a few.  

These programs will ask you a bunch of questions, and autofill the tax forms based on your answers. Once you’ve answered the questions, you can submit your return to the IRS directly from the program.

If your tax situation is simple (think w2 income, no investments or rental property), you may be able to file both your federal and state returns for free. However, if you have freelance income, own a business (that gets reported on your personal return), or have investments/rental property, you may need to pay to file. Depending on your specific needs, and the program you file with, you’re looking at $30-$90 for the federal return. Your state return will cost extra.

Note: Credit Karma is completely free for both federal and state returns. However, there are some limitations to the program.

Tip: If you earned less than 66k, you can e-file your federal return for free through the IRS Free File program. Your state return may also be free (see program details).

Follow the Instructions

If you go the paper route, the 1040 form will have a booklet that goes along with it. The booklet explains what to do line by line on the form. Be sure to follow this guidance to a ‘T’.

Even though e-filing systems do the calculations and data entry for you, you still need to understand the questions you’re being asked. Be sure to use the onscreen resources (like FAQs, hints, and in some cases, live chats) if you need clarification at any point.

Tip: It’s helpful to run through the filing process super early (stopping short of submitting your return) in case you end up owing money. This will give you some extra time to come up with the payment before the deadline. (However, if you’re certain your return is accurate and you’re getting a refund, submit that sucker ASAP!)

Ask for Help

Whether you’re a first-time filer or you’ve been doing taxes for a while, it’s a complicated ordeal. There’s zero shame in getting help. That’s how you learn and make sure you get this very important task done right. Don’t be shy and reach out to a professional or someone you trust if needed.

Tip: If you earned less than 55k, you can get free tax filing assistance from Volunteer Income Tax Assistance (VITA).

Triple Check Everything

You’re in the home stretch! But before you hit file (or stuff your return into an envelope), check over everything. Make sure all of the information you gathered during the prep phase is accurately factored in. If you’re paper filing, review your calculations, make sure you’ve signed the forms, and that all of your writing is legible. If you’re e-filing, go through each screen of the return and be certain that your banking information is entered correctly.

Tip: While not ideal, if you do miss something you can file an amendment up to 3 years later.

Be Proud

Once you submit your return, celebrate! You just completely owned one of the most feared and challenging experiences of adulthood. You can breathe a sigh of happy relief that you’re done — at least until next year.

Spend That Refund Wisely

If Uncle Sam is sending you back a chunk of change, think carefully about the best way to use it. Maybe you can wipe out that nagging credit card balance. Or maybe, it’s finally time to take that trip you’ve been saving for and dreaming about for years. Whatever you decide, make sure you use your newfound cash to fund your best life!

Final Thoughts

Following the steps in this article will get you off to a great start. However, this post is intended to provide general information only. Please consult a qualified tax professional for guidance as needed.

Charlie can help! If you get a refund, ask him about your debt so you can see if making an extra payment is the right move. And, if you do end up owing money, he can help you track a savings goal so you can make the payment on time.

Tell Charlie: What are your best tax filing tips?

Please note: We don’t have an affiliation with or personally endorse any of the services linked to in this post. We’re just trying to give you some ideas.

 

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