Are you taking advantage of salvage value?
Salvage value is an asset’s worth, depending on its use and condition. For instance, a new laptop will have a high salvage value, while a 5-year-old laptop would be nearly worthless.
If you set the salvage value too low or high, your taxes will be off, making it difficult to qualify for financing. What other tips can help you when tax time comes around?
Read on to learn how to file your taxes online, all by yourself.
Create a Checklist
Before you learn how to file your taxes online, you’ll need to get all of your ducks in a row. Missing one step can really mess up your taxes, so it’s good to make a checklist first.
Sit down, take out a handy piece of paper and a pen, and write down everything you know about your tax situation. For instance, what is your income? Did you do independent contract work this year, or was it all traditional?
Don’t forget to jot down any exceptional wealth you’ve accumulated. Draw a line on the paper, and under it, begin writing down anything that could be a deduction. Children, charitable donations, the interest you pay in your home; are all examples of deductions.
The checklist will help you feel confident as you move forward with your taxes online. Having a physical representation of your finances makes it easier to dive into the digital world.
Get All of Your Paperwork
You’re not done with the physical paper stuff yet. The next step is collecting all of your tax documents.
To make life easier on yourself, you should keep a tax folder throughout the year. You should be collecting receipts for anything you plan on deducting. Without proof that you paid for the item, you could deal with an IRS audit, and nobody wants that!
Do yourself a favor and download an app to help keep track of your receipts. You also need your W-2s or 1099-B, depending on your financial situation. W2’s come from your employer.
The W2 will show all of the taxes withheld, along with your income. The 1099-B form is for capital gains. After getting your paperwork, it’s time to go online.
Where to File Taxes Online
There are a few places you can file your taxes online. If you want to use a paid service, we suggest going with a brand name company. Of course, you could save time by using a site like https://www.taxfyle.com/freelance-cpa-jobs to hire a freelancer.
Once you find a trustworthy company, you’ll need to decide what level of service you want. There’s usually a basic level that’ll help with legal tax needs.
Advanced software access will help you find the maximum amount of deductions, along with checking for errors. We suggest going ahead and splurging for the top-tier service that the accounting software provides.
That way, you’ll have peace of mind knowing that your taxes are 100% correct. If you don’t want to pay for online software, there are free options offered by the IRS.
IRS Free File
The perfect middle ground between doing everything yourself and using expensive software is an IRS-free file. The IRS works with different online services to help you complete everything on your own.
The program is entirely free, and there aren’t any catches. There are 2 versions of the IRS free file.
One is for below anyone with a $72,000 annual income, and the other is for those making over $72,000 a year.
The first free file option gives you a variety of IRS partner sites for tax filing. You’ll also be able to get help with state tax filing, including guided preparation resources.
Do you make over $72,000 a year? If so, you’ll have to do more of the heavy lifting. You’ll need some basic understandings of tax calculations and paper filing needs.
State Rules for E-filing Tax Refund
As long as you live in a state that charges a state income tax, you’ll be able to e-file your tax return. However, some states don’t allow you to complete an e-file on its own. You have to file both a federal tax return and an e-file state tax return in these states.
States such as Arizona, Arkansas, Michigan, and Oregon have to abide by the dual filing rule. They’re also states that don’t have a state income tax.
Alaska, Texas, Wyoming, and South Dakota don’t have state income taxes. You won’t have to file a state tax return, only a federal one.
Apply for Payment Plans
Did you file your taxes online, but need more time to pay your tax bill? Don’t stress it. The IRS almost always gives you some type of payment plan option.
The payment plans are generous and let you pay back your tax bill without excessive interest or fees. You’ll be making payments over a stretched-out period.
For short-term payment plans, there isn’t an application fee. For long-term payment plans, you’ll have to pay around $30 to apply online.
Remember that a payment plan doesn’t mean you’re exempt from interest or penalties for late payment. Those fees are going to add up until your balance is at zero.
If you owe over $25,000 in taxes, the IRS will require you to make payments through automatic withdrawals from a checking account. If you’re making payments with a debit or credit card for a smaller tax bill, be prepared to pay a processing fee.
How to File Your Taxes Online Like a Pro
There you go! Now you know how to file your taxes online like a pro. E-file is one of the most convenient ways to take care of state and federal tax returns. You’ll have a digital copy of everything you’ve done, and if you pay for the top-level service, you’ll barely have to do any mental work.
Since gathering up your tax documents is a great place to start, get your papers together today. For more savvy ways to succeed, read another one of our articles.
