To some, attempting to muddle through the drudgery of a tax return can send them cowering in fear. For those that have tackled the task successfully, that fear has been overcome. I have been doing my own taxes for over 10 years, after a relative showed me how simple it was on my home computer. If you can read, you can do your own taxes!
So you have some complicated situations? No problem! The way the software is set up makes it very simple. I have done final returns for deceased family members, educational credits, gambling winnings, you name it. As long as you read the questions thoroughly, the program does the rest.
First you will need to pick which software program you wish to utilize. I have generally gone with H&R Blocks at home program. There are various "free" programs that work just as well, but I learned last year, if you are doing more than one return, you are better off buying the disc. There is no charge for filing with the free programs, but you have to buy the state for each separate return, and you only have access to the return online for a certain amount of time. In the end, for me, the downloadable software was the best choice.
Once you have chosen your program, gather up all of your forms you would have taken to your paid tax preparer. Things like W2 wage statements, 1099 interest statements, 1098s, childcare receipts, etc. including your children's social security numbers. Open your software and start the interview process. After entering all of your personal information, double check it, then SAVE your return! I can't stress enough how important it is to hit save every so often. If your computer shuts down before you save it, you may have to start all over. So SAVE, SAVE, SAVE! Most programs will start with income questions at the beginning of the interview. Read each question slowly, making sure to verify each line. There is usually a box to check if you have that type of income, then it will ask you to put the numbers from your W2s and other statements of income in. Credits usually come next. Make sure you have your child's information entered correctly. A mistake on the birthdate could cost you a significant amount on your credits. This is also the section to enter educational and child are credits. (Preschool tuition can be deducted as a child care credit. Not everyone knows this!). Medical expenses and mortgage interest can also be entered here. It will usually calculate for you whether you should use the standard deduction or itemized deductions. Some programs will even compare a joint return vs. 2 single returns.
When you get to the end of the return, you will decide whether you want to e-file or mail a paper return, and if you would like to direct deposit or be mailed a check, if you have a refund. If you owe, it will print the instruction for payment when it prints the filing instruction. Don't forget to print a copy for your records, and SAVE your return. Its a good idea to compare your return to last year's return to help check for mistakes. I do this even though I have done my own for a long time. Generally, they should be similar, unless there were changes to the tax code. (As it was the year everyone got a tax rebate in the middle of the year. The software still took care of those changes.)
I find it pretty simple to follow the steps of the tax software and pocket the $100. I would have paid a tax professional. It's not as scary as it seems!
