It’s Tax Time: A Guide To DIY

April 18 will be here before you know it, and if you haven’t made a decision on how you’ll prepare your taxes this year, here are a few tips that may push you toward a DIY approach.

Hand Signing A Tax Form - Arvind Balaraman

Shop around for software
TurboTax (www.turbotax.com) is generally the most popular and trusted tax software option, but you’ll typically have to pay around $60.00 per year. It may me worth your time to shop around for some free options. Many tax prep software applications are free up to a certain income threshold, and your costs will also vary depending on the sources of your income. A person with a single W-2 form will usually pay less than a person with multiple W-2s, 1099s, investment income, and other income sources.

Take advantage of homeownership
If you’re reading this newsletter, there’s a good chance you’re a homeowner. Tax time is one of those events that show the benefits of homeownership, because you can get some major tax deductions. Mortgage interest, property taxes, and some home buying costs are among the deductions you may be eligible for. Your tax preparation software should guide you through these deductions.

DIY is great, but so is a tax professional
DIY tax preparation isn’t for everyone. Though tax software companies offer audit assistance for an extra fee, some people enjoy the peace of mind that comes with meeting a tax professional and being able to ask questions about your taxes in person.

A tax professional is particularly helpful if your taxes recently became more complicated, like if you started a business or completed several real estate transactions.