Your Personal Finance Guide: How to File Your Own Taxes
Has the inflation adjustment for standard deductions changed your filing status for 2022?
If you’re like many Americans, you’re probably leaning towards filing your taxes yourself. For most people, it’s actually probably pretty simple.
Here’s how to file your own taxes.
Do You Even Need to File a Tax Return?
Before you decide if you should file your own taxes, without help, start by asking yourself if you even need to file your taxes at all. If you owe federal income taxes you must file federal taxes. If you had any taxes withheld, it’s a good idea to file your taxes, because you might get some of them refunded.
Who Should File Their Own Taxes?
If you don’t have complicated assets and have a pretty “standard” financial situation you can probably file your taxes yourself. You need help when you have more significant and complex investments and are trying to maximize your deductions.
If you make minimum wage and make as much or less than the person providing the tax service to you, you probably don’t need help with filing your taxes.
How to File Your Own Taxes for Free
The federal government provides services for citizens with an annual income below and above $72,000. The options are different for people whose income is less than $72,000 from those with an income greater than $72,000.
For example, the Internal Revenue Service (IRS) offers free tax filing from an IRS partner site, state tax filing, guidance, and math services. For those with an income of more than $72,000 have access to free electronic forms.
Note that federal and state taxes are different things. There are 43 states that withhold state taxes (in addition to federal taxes) and they are separate entities from the federal government. But, the IRS does try to help point to various state-by-state resources for filers who make less than $72,000 annually. It wouldn’t hurt to go to your state’s Department of Revenue website to explore what services they provide.
Should You Use Tax Software?
If anything, you’re paying mostly for peace of mind when you opt to use tax filing software. Most services like TurboTax offer a “no audit guarantee, which alleviates the stress of receiving a letter from the IRS, like this one: https://silvertaxgroup.com/irs-letter-525/.
Tax software is also used often because it acts as a one-stop-shop for filing your state and federal taxes. You don’t need to file with multiple organizations. They are designed to be user-friendly are pretty straightforward.
The only downside is that they follow a more step-by-step, rigid format for filing your taxes. Meaning, there’s less room for you to get creative if that’s something you like to do. They also charge for more “complex” financial situations, like multiple revenue streams.
Financial Literacy Is Priceless
For some of us, simply passing along something as important and personal as your taxes off to someone else, without really understanding it, isn’t a good feeling. If you have the time and interest in learning more about how to file your own taxes works and how to maximize your financial situation, filing your own taxes is a valid option.
Click over to our “Finance” section for more tips for filing your 2022 taxes!