Tips for How to Do Taxes Online

Filing your taxes electronically increases the accuracy of your work and the efficiency with which your return will be processed. Nearly 99 million people used the IRS e-filing system in 2010. The portal is accessible 24 hours a day, seven days a week, and offers faster refunds, a more secure and confidential submission, no paper and a quick confirmation.http://www.irs.gov/efile/article/0,,id=118508,00.html

If you make $58,000 or less a year, you may qualify for the IRS's FreeFile program, which allows you to prepare and e-file your federal return for free.http://www.irs.gov/efile/article/0,,id=118986,00.html The IRS is partnered with tax companies like TurboTax and H&R Block, so you actually work through them to access FreeFile.http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck Visit the IRS website to learn more about the program and to find out if you qualify.http://www.irs.gov/efile/article/0,,id=118986,00.html

Tips for How to Do Your Taxes Online

Understand the basic premise behind your tax return. You are essentially accounting for how much money you made in a year and subtracting any allowable deductions from that amount. The tax you owe is based on the resultant number. If you already had taxes withheld from your paycheck, you may not owe the government anything at all. They may owe you.http://www.irs.gov/pub/irs-pdf/i1040.pdf
File for free. If you made less than $58,000 in 2010, you qualify for the IRS' Free File program, a partnership between the IRS and commercial tax services like H&R Block and TaxACT, that allows you to file your federal tax return online for free.http://www.irs.gov/efile/article/0,,id=118986,00.html
Choose the best service for you. There are dozens of reputable online tax preparation services, and each offers different payment packages depending on how complicated your return is. If you are self-employed or have had any major life changes in the past year, you might consider a more expensive package that will walk you through itemizing your return to arrive at the greatest possible deduction. Start your research with the major tax prep sites H&R Block TaxCut, TurboTax and TaxACT.http://apps.irs.gov/app/freeFile/jsp/index.jsp
Organize your tax records before you begin. Before you sign-up with TurboTax or any other service, you should pull together all the documents needed to fill out your return.http://www.irs.gov/pub/irs-pdf/i1040.pdf
Account for all of your income. You have added up your W-2s and 1099s, but do not forget tips, gambling winnings, jury duty pay, alimony received, fellowships and all the other different forms of income that must be accounted for on your tax return.http://www.irs.gov/taxtopics/tc400.html
Do not forget the most common tax credits. A tax credit is an adjustment you are allowed to make to your gross income whether you are itemizing your deductions or not. The most common tax credits include those for taking care of children under the age of 17, adopting a child and making energy savings to your home.http://www.irs.gov/taxtopics/tc600.html
Figure out whether you should itemize. The IRS lets everyone take a "standard" deduction from their yearly income to arrive at their "taxable income." Your tax is calculated on the basis of your "taxable income" so it stands to reason that you want to take as large a deduction as possible so that your "taxable income" and resultant "tax" is a smaller, rather than larger, figure. Sometimes, itemizing your deductions will allow you to subtract a larger amount from your yearly income than just taking the standard deduction would. You can write off all kinds of things from education and business-related expenditures to medical costs.http://www.irs.gov/taxtopics/tc501.html
Deduct charitable contributions. If you are itemizing your deductions, you can deduct charitable contributions from your tax bill. Your gift must meet certain criteria to be tax-deductible including its amount and the type of organization it was made to. You must have a written acknowledgment of the contribution from the organization to claim the deduction.http://www.irs.gov/publications/p526/index.html
Deduct home office expenses. If you are self-employed, you might consider deducting your home office expenses. In order to claim these expenses, your business must meet an especially rigid set of criteria set out by the IRS.http://www.irs.gov/publications/p587/index.html
Triple check your return. Even though you have prepared your return online, you should print it out and read through it carefully. You want your form to be complete and accurate cause nobody likes hearing from the IRS a few months later.
Have your refund sent via Direct Deposit. If you are owed a refund, consider using Direct Deposit. By giving the IRS your bank routing and account number, your refund will be quickly and safely deposited into your checking or savings account.http://www.irs.gov/newsroom/article/0,,id=105957,00.html
Get an extension. If you cannot file your return by the April 18, 2011 deadline, get an extension. By filing IRS Form 4868, you are automatically granted a six month extension. You do not have to tell them why you need it. Just file the form on time. Keep in mind, however, that this is an extension of time to file your return, not an extension of time to pay your taxes.http://www.irs.gov/pub/irs-pdf/f4868.pdf
Request an installment plan. If you owe more taxes than you can afford to pay, apply for an installment plan. You qualify for this plan if you don't owe more than $25,000 and are able to pay off your bill within five years.http://www.irs.gov/pub/irs-pdf/f9465.pdf
Avoid an audit. There is no way to guarantee that you will not be audited as a certain number of returns are chosen every year at random for the honor. However, you can avoid raising any red flags and be sure that any audit you are subjected to goes smoothly by not rushing when you do your return, staying honest, keeping good records and asking for help when you need it.http://www.irs.gov/businesses/small/article/0,,id=219552,00.html
Plan for next year. Get a jump on next year's taxes by filing your receipts in envelopes marked with the types of deductions people usually take—business meals, business travel, medical, etc.http://articles.moneycentral.msn.com/Taxes/PreparationTips/ItWillPayToPrepareForYourTaxPreparer.aspx

Disclaimer: The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.