How To Do Your Taxes – Getting Started

“Two things are certain in life, death and taxes” – Ben Franklin. Get ready to get out the old calculator, pencil, and tax book and spend the next few months figuring out how to file your taxes with Uncle Sam. Better yet, I’m putting together a guide to help make sure taxes this year are as painless as possible. So start here and come back every week for a new tip.

Week 1 – Getting Started

Despite the fact that the tax code is upward of ten times longer than the Bible, today’s tax software has made it much easier for anyone to file their own taxes. Additionally, competition in the tax software market has helped to keep prices low. Tax software comes in two versions, online or download.

Online Tax Software

  • Stores data online for you
  • Cheaper than downloaded software
  • FREE to try – you just pay to file the taxes

Downloaded or PC Tax Software

  • Stores data on your computer for more security
  • Does not require fast internet connection
  • More expensive than downloaded software

When considering tax software, you should consider the cost plus all the features. Next, I have tried to simplify the process by pointing out the best places to start.

Best Tax Software

Prices are the listed prices. Check out my favorite deal websites to help you save.

TurboTax ($0 Basic and $30 Deluxe for Federal Return; $28-$37 for State)
The market leader in tax software is very easy to use and walks you through all the key questions for taxes. Instead of figuring out what forms to use, the software chooses the right forms based on your income, deductions, and other situations. The software also syncs up well with ItsDeductible.com which allows you to track deductions throughout the year. Although it is more expensive, I recommend TurboTax for its great interface and support. Also, if you are a Vanguard or T. Rowe Price customer then you can save $10-$20.

TaxAct ($0-$10 for Federal; $8-$15 for State)
While not as well known as TurboTax, TaxAct provides very similar features at a great price. The interface has reportedly improved a lot over the years and is comparable to TurboTax. In the past, I have not used TaxAct because of great service from TurboTax, but the difference in price is enough to encourage me to at least try out the online version this time. (Making Cents of Money Blog has TaxAct for $11.90 – Click Here)


CompleteTax
CompleteTax ($0-$30 for Federal; $25 for State)
A less popular option online considering the higher prices and lower quality interface. ¬†Interestingly though, the company is focused only online so hopefully we’ll see improvements and lower prices in the future.

H&R Block formerly TaxCut ($0-$30 for Federal; $30 for State)
This software does not have nearly the usability of the previous two and is on the expensive end. The best feature here is the support you can receive from the company better known for its face to face services. In the end, if you’re uncomfortable with doing your own tax return this may be a good company to call, but try the other software options first.

Free Tax Software
For people with household incomes under $57k and simple tax returns (no house or investments), the IRS provides resources to help you file your taxes for free. Check out the FreeFile website for more information.

Personal Tax Advisors

Many people are not comfortable with the idea of doing taxes through a piece of software. This may include you if you don’t feel comfortable on a computer or if you have a complicated tax situation with many investments and deductions. In this case, I recommend checking out Dave Ramsey’s referred tax providers. Although a personal tax advisor may be more expensive than tax software, you have a better chance at finding all the possible deductions and managing your investments properly.

Recommended Personal Services ($100-$500)

More Tax Ideas

Up next I’ll be discussing Tax Brackets, Retirement and Taxes, and Help on Deductions.

What are your biggest tax questions? Let me know in the comments or Contact Me and I’ll help you out.

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5 thoughts on “How To Do Your Taxes – Getting Started”

  1. Ryan – thanks for the comment on my site. You have a nice site. I like your ebay suggestions. I’ve always been a little intimidated by the whole ebay thing. But you’ve had good results? It’s not too much of a hassle mailing the stuff off?

  2. I used the online version of TurboTax for my daughter and her husband and for my son. Their taxes are very easy and I can’t see paying someone to do it.

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