It’s time to file your US Tax Returns. I would like to share some information for all those who are Filing Taxes for the First Time in USA or those who are filing tax returns online for the first time.
Internal Revenue Service
The Internal Revenue Service is the Tax Collection Agency of United States. The official site of the Internal Revenue Service (IRS) is http://www.irs.gov/index.html. The IRS Website provides lot of information regarding Taxes and Returns for Individuals, Businesses, Charities and Non-Profits, Government Entities, Tax Professionals and so on.
Who are Individual Tax Payers?
The IRS has the following classification for Individual Tax Payers :- Employees, Farmers, International Taxpayers, Military, Parents, Self-Employed, Student, Seniors and Retirees.
Types of Returns
There are two types of tax returns which you need to file:
- Federal Tax Returns – April 15 of each year is the due date for filing your Federal Individual income tax return.
- State Tax Returns – You can find more about Your State’s Tax Forms and Returns here. If you are required to file a state tax return, it is probably due by April 15, but check with your state to be certain.
So the first step is to find out if you need to file Federal and State Returns for last year.
Steps Involved in Filing Your Return
There are 2 steps involved in Filing your Tax Returns:
- Preparing your Returns – Filling out the necessary Forms with the correct details and amounts.
- Filing Your Returns - Sending the completed Forms to IRS either by mail or online.
There are various options available for Preparing your Returns as well as Filing it.
How to File Your Tax Returns?
There are 2 ways in which you can file your Tax Returns.
- Paper File – You fill out the necessary forms and mail it to IRS address given for your area. You can find out where you need to mail your Paper Tax Returns here.
- E-file or Electronic Filing (Filing Tax Returns Online) – When you efile your tax returns, you fill out all forms online and submit it to IRS online. E-filing has lot of advantages over Paper Filing like Greater Accuracy, Quick Confirmation and Faster Refunds. Moreover, you don’t have to worry about mailing the Paper Returns.
Sometimes, you may not be able to E-file. Eg: You don’t have an SSN or ITIN Number. In such cases, you will need to Paper File.
How to Prepare your Tax Returns?
Whether you are Paper Filing or E-Filing, you can prepare your returns yourself or get assistance from a Tax Preparer or Volunteer.
- Tax Preparers – These are individuals who can help you in preparing your Tax Returns usually for a fee. A paid preparer is required, by law, to sign the return and fill in the preparer area of the form.
- Self - You prepare the tax return yourself.
- IRS Volunteers – They offer free tax help to individuals who qualify like people with low-to-moderate income (generally, $49,000 and below), elderly people, military personnel and their families. Check our for details about Free Tax preparation by Volunteers here.
Local IRS Office or IRS Taxpayer Assistance Centers (TAC) are your source for personal tax help. These are Local Offices located in all states. If you need face-to-face tax assistance, you may visit your nearest TAC local office. You can find out the TAC locations in your state on this page.
Filing your Tax Returns Yourself
Most often, individuals can prepare their Federal and State Tax Returns themselves without any assistance. If you go to a Tax Professional, you will be charged a good amount as fees for Preparing the Returns. You can save lot of money when you file your taxes yourself. You can either choose to Paper File or E-File your returns. The easiest method is to use any free online Tax Software and fill out the forms. After filling, you can go ahead and print the forms and mail it to IRS. Or you can continue to e-file the Returns online. E-filing is secure, convenient and paperless. There are some Tax Software Companies which allow you to e-file your Federal or State Returns online for free. Sometimes, you may have to pay a very small amount (around $10) for e-filing your Federal or State returns. But it is far better than paying hundreds of dollars to Tax Preparers or Professionals.
IRS E-file for Individuals
The IRS encourages Individual Taxpayers to file their Income Tax Returns electronically instead of the traditional Paper Returns. E-filing your Tax Returns is convenient and safe. Moreover, you get your refunds faster with Direct Deposit. In 37 states and DC, you can simultaneously e-file your Federal and State Returns.
If you choose to electronically file your Federal Income Tax Returns for 2009, IRS provides the following options for individuals.
1. Using a Tax Software
A Tax Software provides step-by-step guidance right from choosing the correct form to filling in all the details in the forms. The software does all the calculations for you and checks for accuracy. You can find out the List of Companies which provide tax preparation software here. IRS does not offer any free software for e-filing. Some of these software companies may offer State tax Preparation in addition to Federal Tax Preparation. You can choose any of the following options for preparing your returns :-
- Purchase commercially available software from a retailer and install it on your Computer.
- Download software from an Internet site and prepare your return offline, or
- Prepare and file your return online without downloading the software.
You may have to pay a nominal fee for using the Tax Software and e-filing the returns (around $10-$15). Always read the Terms and Conditions carefully before choosing the Software. E-Filing of Federal Income Tax Returns is almost always free whereas for State, it is hardly free.
Some Good Websites for Filing Tax Returns Online are:-
- FreeTaxUSA.com
- TaxHawk.com
- TaxSlayer.com
- OnePriceTaxes.com
- TaxAct.com
If you do not want to e-file or are not allowed to e-file because of any reasons (eg: No ITIN or SSN), you can still prepare your Returns using any Tax Software, print it out and mail it to IRS.
2. Free File
If your Adjusted Income is less than $57,000 in 2009, you will be eligible to prepare and e-file your taxes for free. These are the companies which participate in Free File Program. In addition, many of these companies offer free or paid state tax preparation and efiling services. You can read more about Free File here.
3. Free Fillable Forms
There is no Tax Software involved and it is absolutely free for everyone. These are online forms which can be filled by yourself. You will need to do the calculations yourself. After filling the forms, you can e-file it online. However, State E-file is not supported by Free Fillable Forms. Read more about Free Fillable Forms here. If you do not want to e-file or are not allowed to e-file because of any reasons, you can still fill out the Forms using Free Fillable Forms, print it out and mail it to IRS.
4. Authorized IRS E-File Providers for Individuals
These are Tax Preparers who can assist you with filing. Tax professionals who are accepted into the electronic filing program are called “Authorized IRS e-file Providers”. They mostly charge a fee for providing this service. You can find put an Authorized E-File Tax Provider here. Remember, not all Tax Professionals are Authorized e-file Providers.
With IRS e-file you can prepare your own return and pay a tax professional only to transmit it electronically, or you can pay to have your return both prepared and transmitted. Whichever you choose, shop around for a tax professional who offers the services you need at an acceptable cost to you. Beware of Tax Preparer Frauds. Avoid preparers that base their fee on a percentage of the amount of your refund
Federal/State e-file for Taxpayers
Federal/State E-File allows the electronic filing of both Federal and state income tax returns at the same time. However only some states participate in Federal/State E-File. If your state is there in the list, you can conveniently e-file both Returns online. Some states only allow Direct filing.
How to File your Tax Returns Absolutely Free
Let me summarize the Various Options for Filing your Returns for Free:-
- Get all the necessary forms and fill it out yourself and mail it to IRS.
- Use any free online tax software and prepare your returns. If the Software Company allows you to e-file your Federal or State Returns for free, go ahead and e-file. Else, take prints of the Prepared Returns and mail it to IRS.
- Use Free Fillable Forms and e-file your Federal Tax Return for free.
- You may be eligible for Free File if your Adjusted Income is less than $57,000 in 2009.
- You may be eligible for Free Tax Preparation and filing by IRS Volunteers.
Suggestions
I had used Free Fillable Forms last year to fill out Federal Income Tax Return. I needed to do some calculations myself based on the PDF given on the site but it was not difficult. I couldn’t e-file last year due to some restrictions. So, I took print out of the Forms filled using Free Fillable Forms and mailed it to IRS. For State Income Tax Return, I used a Tax Preparer and had to pay a nice fee.
This year, I went through the various options and decided to e-file both Federal and State Returns online. Luckily, my State – North Carolina was there in the Federal/State E-File list. It was a wise decision. I could e-file both Federal and State Income Tax returns for only $9.95. I used FreeTaxUSA.com for e-filing and it was very easy and accurate. I saved a few hundreds by using an Online Tax Software instead of a Tax Professional. 
Hope this was helpful!!!
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