I’m a firm believer that most Americans should do their taxes themselves. But about 50% of Americans use a paid tax preparer to do their taxes – when they probably don’t need to. There are definitely circumstances when using a tax preparer can make sense (and look up where to find a tax preparer near you), but the vast majority of people can easily DIY their taxes – but they may have some reservations.We’re partnering with H&R Block to show you how easy it is to DIY your taxes, and how to overcome the fear of making a mistake on your taxes. We’ll show you how to do it, how to deal with common issues, and how to not fear the IRS. If you want to start on your taxes while following this article, get started with H&R Block for free here. Didn’t file with H&R Block last year?
Before we dive into how to DIY your tax return, let’s talk about it for a second.The best way to think of your tax return is to think of it as “settling up” with the IRS for the last year. Every month, you typically get taxes withheld from your paycheck. This could cover part or all of the taxes you owe.But remember, you pay taxes on all the income you earned – which could include interest on a bank account, side hustle income, investment income, real estate, and more.Your tax return is where you report everything, including your paycheck income, and any other income you may have earned.It’s also where you report the taxes you already paid in – via those paycheck withholdings or estimated tax payments you may have made.Then, you calculate how much in taxes you should have paid, compare that to what you already paid in taxes, and you either get a refund for overpaying during the year, or you owe taxes to the IRS for the difference.From a financial planning perspective, your goal is to break even – be as close to $0 as possible. If you’re getting a big tax refund, it usually means that you withheld too much out of your paycheck. If you adjust that, you could get bigger paychecks every month, and you’d get a smaller refund at tax time. If you owe a large amount, it could be that you under-withheld your paycheck, or maybe had other income that‘s not taken into account on when you figured your paycheck withholding. You may consider increasing your tax withholding or making estimated tax payments to avoid owing a lot at tax time in the future. If you pay too little during the year, you may owe an additional penalty, even if you pay your full balance due when you file.If this sounds confusing, don’t be scared tax software like H&R Block Online handles all of this for you. All you have to do is enter your information!
Now that you understand the basics, how do you get started doing your own taxes? It’s really easy – you simply need to use tax software like H&R Block Online, follow the prompts, enter the required information, and you’re set!Depending on how complex your return is, this process can take as little as 15 minutes! Check out our H&R Block Online review and see us do a mock return!To get started, you need to collect your tax documents – your W2 for work, 1099s, etc. I love using an income tax binder to keep everything organized. This is basically a folder where you keep everything in one place for taxes, and it makes tax prep easy!Then, you’ll simply start following the prompts and entering the information required. For example:
When it comes to reporting your income, you follow the prompts and enter the information on the specific form and the box that the software asks for.For example, when entering your W2 employment income, you’d follow the prompts to enter the information in Box 1, etc.Once you finish entering everything, the tax software you use will calculate your tax refund or what you owe.To get started, check out H&R Block Online and
One of the great features of H&R Block online this year is the ability to easily switch from a paid preparer or other tax software program to them in just two clicks. This can save you a lot of time and get your tax return prepared faster!As long as you have a copy of your last year’s tax return, you can upload it to H&R Block and it will import all your information to make the switching process easy.
One of the biggest things that “scares” people about doing their own taxes is that they will make a mistake. This can either result in a smaller refund (or even owing taxes) or worse – an audit!It’s important to remember that the math of your tax return is always the same – that’s what decides your refund or tax bill. But, making a simple typo could result in a problem.According to this Forbes article, the most common mistakes when it comes to filing taxes are:
If you notice this list, there are two “buckets” of errors.Things like typos, misspelled names, and incorrect bank account numbers can be controlled by you when you enter the information. Things like filing status errors, math mistakes, PINs, and errors in deductions can all be avoided by using great tax software. In fact, H&R Block Online has an accuracy guarantee for this stuff.
Okay, so what if you get started doing your taxes online and you need help? Well, you’re not alone – it happens. That’s why great tax software combines easy to DIY data entry with easy access to tax professionals.When it comes to H&R Block, they offer Federal and State Online Assist for an extra charge. All you have to do is click the Help Center and ask to speak or chat with a tax pro. Once you upgrade to Online Assist, you can ask as many questions as you’d like when it comes to your return.This is a great option for people who want to DIY their tax returns, but maybe have a question about how to enter a form, or simply don’t want to make a mistake. Plus, even when using tax pro assistance, your total cost of filing your taxes will still likely be less than using a professional paid tax preparer.
This is the biggest fear most new DIY tax filers worry about – and it’s a very over-blown worry. Straight from the IRS, only about 0.50% of all tax returns get an audit. And of those, most are via correspondence (mail), where you simply need to provide requested documents.As long as you’re entering your information accurately, this isn’t something you should worry about.If you do get a letter from the IRS and you’re concerned, H&R Block can help you. They offer audit support and assistance services that can help you navigate talking to the IRS about your tax return.So don’t let this fear hold you back!
If you’re new to doing your taxes yourself, it can be scary. But once you do it once, it’s really easy to see how it all works. For the most part, your tax return is simple data entry – looking at your documents and entering the correct information online. Tax software like H&R Block can walk you through exactly what to enter so you don’t miss anything.So, take action!