Filing Taxes on a Budget? Here Are 10 Options
- The Internal Revenue Service (IRS) has a list of resources that will allow you to file your federal taxes for free or at a low cost!
- It’s important to research the platform you plan to file your taxes on to lessen the risk of an audit or delayed returns. If you’re filing with a professional agent, make sure you research the agent and their company too.
- Organize all your documents before the filing date to save you time and money.
Tax season can either be the most wonderful time of the year or the most stressful time of the year. Although the entire globe is still at the height of the pandemic, there are going to be some potentially interesting things that come with this year’s tax season!
The Internal Revenue Service (IRS) announced that tax filing season began on January 24, 2022. Below are resources and reminders that you will need in order to have a successful filing season!
Tax Filing Resources
Whether you plan to file your taxes on January 24 or file on the very last day, April 18, also known as Tax Day (Maine and Massachusetts can file on April 19), there are resources that can allow you to file your taxes at a low cost or for free!
The IRS has started advising Americans to file their returns electronically and use direct deposit. Due to the pandemic, the IRS, like numerous other businesses, is understaffed and backlogged.
Free Tax Return Preparation for Certain Qualifiers
You could qualify for either the Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) programs based upon certain qualifications.
Tax Counseling for the Elderly (TCE) Program
The TEC program offers free help for those 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.
These programs are very secure because the volunteers must take and pass tax law training that meets or exceeds IRS standards. Additionally, the IRS does a quality review check for every return prepared at a VITA/TCE site prior to filing.
Guided preparation is another IRS-based option to help tax filers with an Adjusted Gross Income (AGI) of $73,000 or less. You get to ask simple questions, and they will do the math for you. Another perk with this resource is that even some state preparation and filing are free!
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Self-Guided Tax Preparation
You can also use free electronic fillable forms that you can complete and file yourself. You will receive a transcript of your federal return when you complete it. Keep in mind that this database is cleared after every tax season. Although this method is self-guided, it could still be a valuable resource!
Other places to consider as resources when filing your tax returns are:
- Your state’s tax office
- Your local library
- Community centers
Low-Income Tax Clinics (LITCs)
While some low-income clinic programs are operated through federal funding, they are often run by universities with tax law programs or law students. In addition, while most LITCs focus on federal returns, some may offer state return preparation.
AARP Foundation Tax-Aide
For those 50 and up, you can utilize the AARP Foundation Tax-Aide program for free tax preparation. While the AARP is for those within that age range, the AARP offers free help to any taxpayer. Their core focus is to assist people who are 50 or older and have low to moderate incomes.
Taxpayer Advocate Service (TAS)
Taxpayer Advocate Service is an independent organization within the IRS. This group may also be a great help for those facing financial hardship due to a tax situation or lien. There are also TAS offices in every state, the District of Columbia, and Puerto Rico.
The MilTax Program is for those who are currently in the military or have a spouse or dependent child of someone who is in the military or has served in the military.
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This program will understand all sorts of situations that military families and individuals face, such as deployments, combat, training pay, housing, multistate filings, living Outside the Continental United States (OCONUS), and more.
TaxAct provides affordable digital preparation for individuals, business owners, and tax professionals. The TaxAct Free allows you to file your federal return for free and your state return for $34.95 per state! Their most popular filing level is the Deluxe which is $24.95.
In addition, you only pay when you are ready to file. Their XpertAssist allows you to ask for live advice from Certified Public Accountants (CPAs) and experts, free of charge for all levels.
A similar platform is FreeTaxUSA; the major difference is that their state filings are $14.99 per state.
What to Keep In Mind This Tax Season
Before signing up and utilizing any platform or service, thoroughly do your research. Always double-check for filing (and recurring) fees that you might have to pay. Checking the reviews is especially helpful when choosing a particular platform to file with.
Having Your Family/Friends File For You
If you decide to use a family member or friend, be mindful of their tax filing practices. Doing your due diligence could help you from being audited or return delays.
While the IRS has a checklist for getting prepared for filing your taxes, look to see if there are any other things that can help your return. For example, for those who received Child Tax Credit in 2021, lookout for Advance CTC letter 6419. Make sure all your information is correct before starting your filing process.
The IRS is making sure that we all stay updated on our return status from their website, social media pages, and mobile app.
Calling By Phone
The IRS phone line more than likely will have a long hold time due to being understaffed and the uptick in COVID-19 cases and those calling about stimulus checks.
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Scamming and tax fraud occurs typically every tax season, so it’s important to be aware of any red flags. Most correspondence from the IRS happens through the mail or their portal. However, it’s essential to double-check all documents before sending them back or filing them online. By doing so, it will decrease the likelihood of you being scammed.
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