It’s the beginning of the new year, which means tax season is approaching fast. April 15, 2020, is the deadline to file a 2019 federal tax return, and though the filing process hasn’t gotten any less complicated, it can be a smoother experience, especially if you start planning now. You can go the traditional route and hire a tax professional, but there are also a handful of online tax filing resources (some are for free, and others are for fees) that you can take advantage of to make the process much more manageable. Here are five tips to get organized, stress less, and put money back into your pocket so you can spend it on something fun, like a family vacation or a remodeling project.
1. Explore Free Programs
If you made less than $69,000 in 2019, you’re entitled to use the IRS’s Free File program, which is about as good as any pay-to-use tax filing program out there for fairly simple incomes. It’ll even let you request an extension for free if you don’t think you can get your taxes done in time.
If you made more than $69,000, there are still free options. If you’re a standard W2 employee—meaning you have one full-time job—opt for TurboTax’s free software, which should have everything you need. It’s free because it can’t (more accurately, it won’t) handle the more complex deductions or jobs like self-employment.
The IRS also offers free tax documents, though they might take some research to figure out.
2. Stay Organized
It might be too late this year, but it’s never too early to organize your finances for next year. It’s important to keep all paper documents in one place; a simple expanding file folder is your friend (try this Fireproof Expanding File Folder with 13 Multicolored Pockets, $21.99). It’s also essential to keep digital documents all in one place. Those might include last year’s filing, your W2 or 1099 forms, 1098 homeownership forms, records of retirement funds, and the list goes on. Although that’s quite a few documents, H&R Block has a checklist to ensure you have everything ready.
3. Consult with a Professional
If you have complicated tax situations (like if you’re self-employed, have a lot of investments, for example), or lack the time or patience to go the DIY route, hiring a tax preparer can save you money. Nerdwallet has tips for finding a good one: ask for advanced licenses, make sure they’ll represent you in case of an audit, and don’t pay too much. The average price for an itemized tax return, both state and federal, is $294—and you might end up making that back with that expert intel. Another reason to shell out for this service: You may not keep entirely up to date with all the changes in the tax code, but a tax preparer will know the ins and outs and be able to help you take advantage of credits and deductions you might not know.
4. File Online
Snail mail is fine, but you can file taxes even faster online. Streamline the process by tracking receipts via the Expensify app (free, iOS and Android). Then use a DIY service, such as H&R Block (free, or $39.99 with on-demand help) or TurboTax (free, or $40 for the Deluxe version) which will take you through filing step-by-step. The IRS’s Free File program will also file your taxes online.
There are a few benefits to filing online. First, the IRS will contact you much more quickly if there’s something wrong with your filing. It’s also more challenging to submit paperwork with errors or missing information (like dates and signatures) when you file online. And you’ll also have all the records, right there in your email.
If you hire a tax preparer, ask them if they file via mail or online—and opt for filing online if given a choice.
5. Carve Out Time—and Breaks
Even when at its easiest, filing taxes can still be stressful and time-consuming. But there are plenty of ways to relax, even while deep in a pile of receipts. Make sure to take frequent breaks, one an hour, even if it’s to do some stretches or take a five-minute walk. Turn off your phone and take a tech break—smartphones are stressors, and you don’t need it pinging you every two minutes while you’re working on your taxes. Put on some music, too. It doesn’t matter what kind; classical music has proven to be a de-stressor, but listening to whatever makes you happy can make the task more pleasant.
Filing taxes requires some time, but it’s imperative to get them done. According to the IRS, penalties for filing late and paying late add up quickly. You do have the option to file for an extension (without penalties), but you must do so by April 15 and submit your return by October 15.