Going to college; getting your first job; moving into your own place...
To these rites of passage add one more: doing your own taxes. It’s not as scary as you might think because there’s help available. It’s called Free File, and it’s offered exclusively from the IRS in partnership with nearly 15 leading tax software companies. About 3 million people use it every year.
Free File lets you choose brand-name software that does the hard work for you — all for free. And, it offers a fast, safe and free option for everyone. Brand-name tax software is available to those who made $57,000 or less in 2012 — which is about 70 percent of us. Earned more? Try Free File’s online fillable forms, the electronic alternative to IRS paper forms.
Three Simple Steps
Step 1: Gather Your Tax Information
—Collect your tax information and log on to Free File through the IRS website: www.IRS.gov/freefile.
Step 2: Choose an Option
—The “Help Me Choose A Company” option helps you pick the brand-name software that will guide you through the tax process.
—Free File Fillable Forms, the electronic documents, perform basic math calculations and are for people who are comfortable preparing their own paper tax returns.
Step 3: Prepare and e-file Your Return
—E-file your return for free. No matter what option you choose, IRS and brand-name software providers use the most current technology to ensure tax information is encrypted, so it’s safe and secure when it’s transmitted.
Free File is also available online 24/7, giving you the freedom to choose when and how you do your taxes.
Keep this list as a checklist of the items you will need to do your taxes. The IRS recommends keeping all tax-related documents for three years, in case of an audit. Tracking income-related documents can help you take full advantage of deductions available to you.
—A copy of last year’s tax return
—Valid Social Security numbers for yourself, spouse and children
—All income statements, i.e. W-2 forms, from all employers
—Interest/dividend statements, i.e. 1099 forms
—Form 1099-G showing any state refunds
—Unemployment compensation amount
—Social Security benefits
—Expense receipts for deductions
—Day care provider’s identifying number
Earned Income Tax Credit (EITC)
No tax benefit offers a greater lifeline to working families than EITC. Yet, one out of every five eligible taxpayers fails to claim it, according to the IRS. Because of the economy, even more people may be eligible if they have had changes in their earned income.
A few things to keep in mind:
—The maximum credit for 2012 tax returns is $5,891 for workers with three or more qualifying children.
—Eligibility for the EITC is determined based on a number of factors including earnings, filing status and eligible children. Workers without qualifying children may be eligible for a smaller credit amount.
EITC: Eligibility Requirements
—You must have earned income.
—Your adjusted gross income cannot be more than the limit.
—Your filing status cannot be “Married filing separately.”
—You must have a valid Social Security number.
—You must be a U.S. citizen or resident alien all year.
—You cannot file Form 2555 or Form 2555-EZ.
—Your investment income must be $3,200 or less.
Did you know?
—Most refunds are issued in less than 21 days.
—Combining e-file with direct deposit is still the fastest way to get your refund.
—Use “Where’s My Refund?” to get personalized refund information based on the processing of your tax return.
—You can also use the IRS app, IRS2Go, to check the status of your refund.
—Can’t meet April 15 deadline? Use Free File to get a free extension—then use Free File to do your taxes by October 15.
Volunteer Income Tax Assistance
There are thousands of Volunteer Income Tax Assistance (VITA) sites nationwide offering free help to those earning $51,000 or less. To locate the nearest VITA site, search for “VITA” on www.IRS.gov.
Tax Counseling for the Elderly (TCE), supported by AARP, offers free tax help to people who are aged 60 and older. Locate the nearest AARP Tax-Aide site at AARP.org or call 1-888-227-7669. Some VITA/TCE sites even offer Free File. You can do it yourself on their computers.