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5 Ways to Make Filing Taxes Easy

By Matthew Frankel, CFP® - Jan 23, 2016 at 7:57PM

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Tax time doesn't need to be difficult or stressful if you follow these five suggestions.

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Filing a tax return isn't exactly fun for many people, but it doesn't need to be too difficult. With some smart planning, as well as some software-provided assistance, you can make the process as painless as possible. Here are five suggestions that can help you do just that.

Get organized
If you haven't done so already, gather all of the documentation you may need before you sit down to prepare your tax return. This includes any mail you received that had the designation "tax document enclosed," as well as any necessary receipts you may need.

This is by no means a complete checklist, but here are some items you should gather before starting your return.

  • W-2 and 1099 forms, including those for dividend and interest income
  • Mortgage interest (Form 1098), mortgage insurance, and property tax information
  • Student loan interest information (Form 1098-E)
  • Tuition and fees documentation
  • Cancelled checks that can back up any donations you claim (see this article for a thorough discussion on charitable donation documentation requirements)
  • Medical bills exceeding 10% of your income
  • Documentation of contributions to your traditional IRA or similar retirement account
  • All receipts to document unreimbursed business expenses and other deductible items

Get a playbook
Let's face it -- there is no way you're going to memorize the entire United States tax code before you file your 2015 tax return, but you still need to be able to find relevant information.

Because of this, one smart way to make your life easier at tax time is to download a copy of IRS Publication 17, called "Your Federal Income Tax." This publication explains the tax law, and provides all of the general rules for filing your return that you are likely to need.

In this guide, you can find such information as:

  • Who needs to file a tax return
  • Which tax form you should use
  • When your return is due, and how extensions work
  • An explanation of the various tax deductions you may qualify for
  • How you can get help from the IRS
  • Important addresses, websites, and phone numbers

Now, I realize that a 288-page document may seem odd to include in a list of things that can make your life easier. However, think of Publication 17 like a dictionary: You're not going to use all of the information in there, but when you need even one small tidbit of information, you'll be glad you got it.

Decide how you want to prepare your return
Most people these days file their returns electronically, and there are several excellent tax preparation software programs such as TaxACT, TurboTax, and H&R Block that can make the process easier.

If you earn less than $62,000 per year, it may not cost you a dime to use one of these, thanks to the IRS' Free File program. The Free File program is a public-private partnership between the IRS and tax-prep software providers, designed to allow low- and moderate-income taxpayers to file their Federal returns at no cost.

As of this writing, there are 13 providers listed on the IRS website, and each one has different eligibility criteria. For example, TaxACT's Free File is available to taxpayers with adjusted gross income of $50,000 or less, and who are either under 57 years old or eligible for the Earned Income Tax Credit. Taxpayers residing in certain states can also file their state return for free. Jackson Hewitt's software is available for Free File taxpayers who earn up to $62,000, but the maximum age of eligibility is 49.

According to the IRS, 70% of taxpayers qualify for at least one of the Free File software programs, so it's definitely worth looking into if you earn less than the cap. If you don't qualify, you can shop around and find a paid product from one of these software providers for a fee, which many people consider to be well worth it.

Better yet, you may qualify for free help
In addition to the Free File program, there are two programs run by the IRS and staffed by volunteers that could provide free tax help if you are over 60 years old or if your AGI is under $54,000.

First, the Volunteer Income Tax Assistance (VITA) program provides free tax help to people who make less than $54,000, as well as people with disabilities and those who speak limited English. Also, the Tax Counseling for the Elderly (TCE) program provides assistance to taxpayers over age 60, and its volunteers are trained to handle senior-specific issues such as pensions and other retirement issues.

There are VITA and TCE sites all over the U.S., and the IRS can help you find one. The volunteers will help you fill out a variety of tax forms, and you just need to bring documentation and identification.

Make time
I can tell you from experience that the easiest way to prepare your own tax return is to do it all in one shot. So, set aside a block of time where you'll be doing nothing other than completing your tax return. Depending on the complexity of your specific tax situation, this could mean an hour or an entire weekend. However, by doing it all at once and staying on task, you'll save time in the long run.

If it's still too much...
Most of these suggestions are oriented toward individuals without complicated tax situations, such as freelance income or business taxes. If your taxes seem a bit too overwhelming to handle by yourself, the best way to make your taxes easy could be hiring a solid CPA to do them for you.

The main point of this discussion is that no matter whether your taxes consist of a simple 1040EZ form, a complicated small business Schedule C, or something in between, you always have ways of making your taxes a little easier.

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