Photo: Christian Heilmann, Flickr.
If you're feeling daunted by the prospect of preparing and filing your tax return, that's entirely reasonable. After all, our tax code has just kept getting bigger and more complex over the years, recently close to 4 million words long. (To envision that better, imagine 13,333 books, each 300 pages long.) Fortunately, you don't have to deal with your taxes all on your own. There are many sources of tax help you can tap.
Don't do it yourself
For starters, know that you needn't do it the old-fashioned way, by hand, on your own. There's no shame in hiring a tax professional to prepare your return for you, and though that might cost more than you'd like to pay, it can also be well worth it. Someone who knows much more about the tax code and available credits and deductions, as well as tax strategies, might save you thousands while costing you merely hundreds. (Many preparers charge less than hundreds of dollars, too, though adding strategizing to the mix can up the cost.)
For basic preparation, the National Society of Accountants estimates that in 2015 Americans will pay an average of $159 for help preparing a simple tax return with no deductions and an average of $273 for help preparing and filing an itemized Form 1040 with Schedule A and a 2014 state tax return. Some free help is also available, but for many of us, those average costs are not prohibitive and can be well worth it, even if it just saves us considerable time.
There are hundreds of thousands of tax preparers out there, which can make matters confusing. The ones with the most training and expertise will likely be certified public accountants, enrolled agents, or tax attorneys. If you have a very simple return, you may not need much expertise, but if you have some complexity in your financial life, such as self-employment, stock options, a lot of investing activity, or many deductions, more expertise might be in order. If you want to hire someone, interview several candidates before deciding on one.
Photo: Charles Barilleaux, Flickr.
Soft serve
Another alternative is tax-prep software, such as TaxCut, TaxACT, or H&R Block's software, which comes in free versions and paid versions. Compared with hiring a person to prepare your taxes, this option is less expensive -- and fairly effective, too. The software makes it easy to play around with numbers to see how various strategies might work out, and to update numbers or fix errors easily. Any changes you make are updated throughout your tax return automatically. The programs do a good job of getting the necessary information by asking you questions and then filling out forms for you. The packages also offer help as you move through the process.
Help from the IRS
The IRS itself offers a lot of help, though repeated budget cuts have been constraining its capability. You can start looking for answers to any questions by just going to the IRS website at www.IRS.gov and typing words related to your question into its Search box. (The IRS wants you to know that its only website ends in .gov, and that sites ending in .com, .org, .net, or anything else are not the IRS.) It offers a page of links related to preparing and filing your return as well as a page of help and resources.
Preparation and filing help
For help with basic tax information and preparation of simple returns, there's the Volunteer Income Tax Assistance program. It's sponsored by the IRS and offers trained volunteers to help lower-income taxpayers (recently defined as those earning $53,000 or less annually) along with people with disabilities, the elderly, and people unable to speak English very well.
Tax Counseling for the Elderly is another program. It targets those aged 60 and up, as does AARP's Tax-Aide program, with some 35,000 volunteers stationed at about 5,000 locations across the nation.
Photo: stockmonkeys.com.
IRS Free File is a program offered by the IRS and tax-prep software makers, featuring free use of tax-prep software for those with adjusted gross income of $60,000 or less in 2014. The Free File Alliance notes that about 70% of Americans, or 100 million people, qualify, and that more than 43 million returned have been filed through the program since it began in 2003.
You can access the IRS's Free File Fillable Forms no matter what your income level is, and it lets you fill out forms online, with the math being done for you. Returns filed this way can get a speedy refund if one is due.
When deciding which of these (or other) options to use, think about not only your income level, but also how complicated your return is and whether you need or can get assistance with state forms. The paid software-prep packages can include the preparation of state forms, and can handle trickier returns, too, such as ones requiring itemization or other schedules.
Nina Olson is our National Taxpayer Advocate. Photo: Taxpayer Advocate Service.
The Taxpayer Advocate Service
Finally, know that there's a Taxpayer Advocate Service, headed by National Taxpayer Advocate Nina Olson. It has offices around the country and a mission to help resolve problems. In its own words:
"The Taxpayer Advocate Service (TAS) is your voice at the IRS. Our job is to ensure that every taxpayer is treated fairly, and that you know and understand your rights. We can offer you free help with IRS problems that you can't resolve on your own. We know this process can be confusing, but the worst thing you can do is nothing at all!"
Preparing and filing your taxes is rarely fun, but it can be rewarding, if you can easily get answers to your questions and can minimize the taxes you pay by tapping available resources.
