Hearing the words “doing taxes” may invoke images of people pulling their hair out, experiencing headaches and spending hours in shear frustration. If, as a reader of Single! Young Christian Woman, you are indeed single and young, at this stage of life, tax prep is probably pretty easy – without dependents, enough deductions to itemize, huge investment portfolios or business expenses. If this describes you, there is no reason to fear taxes (unless you owe) and absolutely no reason to pay someone to prepare your taxes. Whether you are a first time tax filer or have a couple of seasons under your belt, here are a few tips that will help your tax preparation go smoothly.
The first thing that you should do is determine which form you will need to fill out. You are probably a good candidate for using the IRS 1040EZ tax form. According to the IRS, you qualify to use this form if “your taxable income is below $100,000, your filing status is Single or Married Filing Jointly, you and your spouse – if married — are under age 65 and not blind, you are not claiming any dependents and your interest income is $1,500 or less.” If you have paid a good amount in home mortgage interest, charitable donation, or work-related expenses, it may be advantageous to use the regular 1040 tax form (often called the long form). If you are unsure if the 1040EZ is the right form for you, the IRS can help you find the correct form for your situation by visiting http://www.irs.gov/taxtopics/tc352.html. (Be sure to bookmark the IRS Web site as it provides a wealth of helpful information.)
Once you have downloaded the correct form (the 1040EZ form can be downloaded in a PDF format here http://www.irs.gov/pub/irs-pdf/f1040ez.pdf) you are ready to start plugging in your information.
The 1040EZ tax form is exactly that – easy! It’s only two pages long and if you have all your paperwork in front of you, you should be done in fairly short order and without too many headaches. If you find the form to be too confusing or would like further clarification on what the IRS is asking for, they have provided a helpful 1040EZ publication with instructions: http://www.irs.gov/pub/irs-pdf/i1040ez.pdf. This is an extremely helpful document and if you walk through it step-by-step you should not run into any trouble. A quick internet search will also provide resources that will further explain the process if you still find yourself confused.
Here are a few things to look out for as you work your way through the form.
After you input your basic information you will need to gather some paperwork to ensure that you are reporting the correct figures on your form. The first document you will need is your W-2 form(s). By law, your employer(s) must provide you with this information by January 31st. The W-2 form provides you with information such as gross income, various taxes withheld and other pertinent details regarding your employment. Next you will need bank statements (IRS 1099 INT) detailing any interest you earned from investments or interest-bearing checking or savings accounts. If you haven’t kept a file with organized paperwork for this year, I suggest that you start right now for 2011. This will be very helpful this time next year and it’s good to get into the habit now of maintain records of your tax-related documents. As you age, preparing your taxes is likely to get more complex and this habit will serve you well.
As you are filling out your tax form you may want to consider getting your refund by direct deposit. This will expedite your refund and make it more secure. On the other-hand, if you owe the government, the instruction sheet will walk you through ways to pay Uncle Sam and provide assistance on what to do if you cannot pay in full at that time. Don´t fall prey to instant refunds offered by tax prep companies. If you can just wait a couple of weeks for your direct deposit refund, you´ll save yourself a wallet full of cash. Instant refunds are losing propositions for 1040EZ filers.
Once you’ve crunched and re-crunched all your numbers and are ready to finish your civic duty, you can e-file – or electronic file – online for free. This is the easiest, safest and quickest way to submit your information. Visit the IRS e-File Web site at http://www.irs.gov/efile/ to figure out which method of e-filing is right for you.
With a little bit of instructional reading, a good calculator, organized paperwork and just a bit of brain power you should be able to breeze through your tax preparation. Clear a couple of hours from your schedule right now and don’t wait until the last minute. The last minute for filing this year is Monday, April 18th.
If you really have a mental block on numbers, comb your friends and family for a tax-savvy person who might help you. With all the info you need, a tax savvy friend or relative can prep your 1040EZ form in about 15 minutes; yes, it is that easy, which is why you should not pay to have that form prepared for you.
And while no one likes doing – and especially paying taxes – remember the words of Jesus in Luke 20:21-25:
“‘Teacher,’ they said, ‘we know that you speak and teach what is right and are not influenced by what others think. You teach the way of God truthfully. Now tell us—is it right for us to pay taxes to Caesar or not?’ He saw through their trickery and said, ‘Show me a Roman coin. Whose picture and title are stamped on it?’ ‘Caesar’s,’ they replied. ‘Well then,’ he said, ‘give to Caesar what belongs to Caesar, and give to God what belongs to God.’”