April 15 is lurking around the corner. Like an extra serving of beets or an unwanted guest. You know it’s there. You know you have to deal with it, but you just don’t want to.
If you are like 27 million American households, you may decide to do your taxes yourself and file with the IRS.1 But how will you know if it’s right for you? In the first of this two-part series, I will cover if you should file taxes yourself—either on paper or with tax software. Next week, we will cover if you should hire a professional to handle it.
While it may seem daunting when you first think about it, here are reasons you should consider doing your own taxes:
- It is less expensive. The cost of hiring someone to do your own taxes varies greatly, but it can be as little as $100 to over $400, according to the National Society of Accountants.2 If you file your own taxes on IRS.gov, it costs you nothing. TurboTax, America’s number one tax preparation software, is $35 to file federal taxes (depending on the package you choose), and $37 per state you file in. That can add up to some pretty serious savings while you wait for your tax return!
- The 1040EZ really IS easy! If you have an uncomplicated financial situation, the 1040EZ is totally the way to go. I have finished it by hand in about two hours. The 1040EZ form is for anyone who:
- Is without dependents
- Earns less than $100,000
- Has no student loan interest deductions
- Is under age 65
The regular 1040 form takes a little more time, but I can knock it out in an afternoon or evening. Another advantage of online software is that it makes it even easier to file because they ask “Yes/No” questions and walk you through the process step by step. There is a reason I used TurboTax for nearly 10 years—convenience and ease of use!
- It is an excellent way to take stock of your financial picture. For many years, I never balanced a checkbook or was sure how much I had in retirement. But every late winter/early spring, I would get my documents out to assess my finances. It is an excellent reminder time to stop and take stock of where you are and where you want to be with your money. Are you saving enough for retirement? Are you making your money work for you instead for working for your money? Those hours you spend doing your taxes are time well spent because you can set new goals and reaffirm your commitment to being financially savvy!
- It’s like riding a bicycle. The first time I filed my taxes in my 20s was a bit of a challenge—especially the state forms (which I personally think are a lot more complicated than federal forms) and I had no one to help me. But the good news is that it got a little easier every year because I learned a little more with every return I filed. By the time I filed my last return on my own in 2014, I filed with TurboTax in about an hour.
- Lots of help is available. If the thought of doing your own taxes still sends chills down your spine, take heart. There are so many free resources available to help you do it! If you make less than $54,000, you may qualify for the Volunteer Income Tax Assistance (VITA). These are IRS-certified volunteers who can walk you through the process. I promise it isn’t nearly as scary to have someone explain it to you!
There are also a myriad of resources online, from IRS.gov to blogs and search engine results. You are not alone in this process! Is there a friend or family member you can enlist to help you out? Or have a tax-filing party where you sit down with your forms (maybe a bottle of wine), and help each other out? The more the merrier!
From the low cost to the self-reflection it generates, doing your own taxes makes a lot of sense. I think doing your own taxes is the mark of a strong, confident, and independent Plus One Woman. You have the dignity of taking control of your financial destiny and have learned something about yourself in the process.
Have you ever filed your own taxes? Comment below and let me know how it went!