Tax time is agonizing for many as they try to navigate the maze of rules and forms that is the Internal Revenue Service. Computer programs have made it much easier to calculate your taxes for cheap. Before you pickup a program at the store or consider hiring a CPA or tax professional, check to see if you can get your taxes done for free.
The IRS offers a service called VITA or Volunteer Income Tax Assistance for anyone making $51,000 or less. I used it when I first started in this business and made peanuts. While it’s a good service, you need to be careful. Most of the tax returns these volunteers prepare are simple. However, if you freelance as I did back then to make some extra money be careful. My taxes were done wrong, and then I was stuck fixing the mistakes by myself years later when they were spotted. The volunteer didn’t fully compute the business tax properly for independent contractors and I ended up owing a few dollars more. It wasn’t much money, but it was a headache to fix the mistake.
I still saved money with the volunteers because I got my taxes done for free, but I spent hours fixing their mistakes that were duplicated for a few years.
That was back in the days when people filed paper returns. Now, that computers do the hard work for you those mistakes are less likely to happen. The IRS also has Free File programs which allow you to prepare your taxes for free with online software if you make $57,000 or less. While it’s called Free File, you need to read the fine print on the individual company you choose. It’s only free to file your federal return, and some sites charge you a high fee to file your state return.
Check a few sites before you decide on a company. You should be able to get your state taxes filed for under $20.