Wednesday, January 23, 2013

Paying Taxes is Not Fun, But You Can Make It Easier

There are not too many Americans who really enjoy paying taxes.  The process is cumbersome, frustrating, and time consuming.  Worse, if you owe, it is that much more painful.  And, even if you don't, and have a refund, you need to declare that as income the next year!  Fortunately, the IRS has made the process increasingly easier for filing on line, and sometimes, totally free.

For more complicated filings, using a 1040 form, reporting business income, unique situations, and state returns as examples, you really ought to use a program such as Tax Act, Turbo Tax, or H&R Block.  I have been using Tax Act since college and it just keeps getting better.  Not only will it walk you through your scenario and ask you questions to aid in your completion, but it will also suggest money-saving strategies.  One example is opting to file jointly vs. separately, since I am married.  The program allows seamless changes to show you how each method will save or cost you more.  Other great advantages are easy importation of last year's returns, which aid in filling out nearly identical annual paperwork, such as 1099-INTS and W-2s that remain pretty static, except for the numbers.

While they will generally make filing income taxes less of a chore, these programs come with a cost, typically $10-20, depending on the amount of forms, choosing additional options, such as archiving, and other extras.  But, you should look for a new customer bonus, which might bring your cost down a bit more.

Tax day does not have to be as terrible or dreadful as you think.  Just be sure to keep good records, too.