Wondering whether you should do your own taxes? First of all, ask yourself if you have the time and patience to prepare and file a return. If the answer is no, then it's probably worth the cost of hiring a tax professional. Most people can save money filing their own taxes with online software, but you need to have a basic understanding of taxes — and trust that a virtual preparer will cover all your bases. See Business Insider's picks for the best tax software »
It's once again time to ask yourself: Should I do my own taxes or hire a pro? Since most people's financial situations change every year, it's a question worth asking annually. The flowchart below can help you make a quick decision, but keep reading for more detailed guidelines.
Should I do my own taxes? Americans have two basic options when it comes to filing their taxes: 1. Do it yourself with tax software or through the IRS website. The IRS does not charge to file taxes. If you're well-versed in tax law (most people aren't) you can print out and mail in your paperwork or request the paper forms in the mail. However, the IRS encourages online filing and directs taxpayers with incomes under $69,000 to its free filing portal, which lists 10 qualified tax preparers that offer free federal filing services (though there's typically an additional charge for state filing). For people with incomes north of $69,000, you can still find free filing options if you have straightforward income. A more complex situation — like self-employment or complicated investments — means you'll likely have to pay for online tax software, which can range from $25 to $100 or more for federal and state filing. 2. Hire a tax preparer to file for you. The only professionals qualified to help you are tax lawyers, CPAs, and enrolled IRS agents. You can search for appropriately credentialed preparers at taxprepareregistry.com. Preparers generally start at around $100 and vary depending on where you live and how complex your taxes are, and accountants might very well charge at least twice that, with similar variations in price according to location and complexity. According to a survey from the National Association of Tax Professionals, the average charge for preparing and filing a tax return is $216. So, should you prepare taxes yourself or hire someone to help? For most people, it's not just about the price. Ultimately, it comes down to what you're most comfortable with. Do your own taxes if: You have the time and patience to deal with it. Taxes probably aren't the kind of thing you should do with Netflix on in the background. Expect to set aside some time to give it your undivided attention — the IRS estimates the average person spends up to seven hours gathering forms and preparing their tax return. If you're a business-owner, expect to spend about 20 hours on your taxes. You have a straightforward tax situation with no dependents, no investments other than retirement accounts, and no significant assets or charitable contributions. Those basic, free versions of tax preparation software mentioned above were created for people like you, who have few deductions or other financial factors to take into consideration. You own a business or are self-employed and feel comfortable navigating business-related tax forms. Business income adds another layer to preparing and filing a tax return. If you have experience with business-related tax forms or you want to save some money on an accountant, you're sure to find tax software that meets your specific needs. You feel comfortable hitting submit and want that control over your money. Taxes are a big deal. If you feel comfortable navigating the software, looking up questions on the IRS website, and the idea of having to fix any errors doesn't terrify you, then you'll probably feel more comfortable doing your own taxes. Hire a professional if: You don't have the time and patience to deal with it. If you feel that the significant time you'd need to devote to doing your taxes would be better spent elsewhere, you might want to outsource. It's probably more prudent than rushing through your filing and making a mistake. You have a complicated tax situation with dependents, investments, or significant assets or charitable contributions, or you own a business. Nearly every financial transaction comes with some kind of tax consequence, and the more transactions you have, the more things you need to take into consideration. People who own businesses, freelance, or are self-employed in particular might want the help of a professional to iron out their atypical tax situations — deductions for home offices, business meals and travel, and vehicles are also audit red flags. You're planning to itemize your deductions. Since President Donald Trump's 2017 tax law increased the standard deduction, fewer filers are itemizing deductions. But if you have major medical costs, a mortgage, or make large charitable donations (among other factors) you might save more money itemizing your deductions than taking the standard deduction. But itemizing can be tricky to navigate on your own, especially if it's your first time. You've had a major life change in the last year. Did you get married? Buy a house? Have a baby? These all impact your tax filing, and, at least the first time you document them on your taxes, you might want someone to show you how best to do it. You don't trust yourself to cover all of your bases. If the idea of entering numbers and talking about dependents and deductions makes you break out in a cold sweat, you might want to leave the preparation to a professional.
More tax day coverage: When are taxes due? How to file taxes for 2019 What is a tax credit? H&R Block vs. TurboTax Join the conversation about this story » NOW WATCH: Behind the scenes with Shepard Smith — the Fox News star who just announced his resignation from the network
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You should file an amended tax return if your filing status, income, or qualification for...You should file an amended tax return if your filing status, income, or qualification for certain deductions or credits is different than what you claimed on your original tax return. The amended tax return deadline for claiming a refund is the later of three years from your original filing date or two years from the date you paid the tax. Currently you can only file an amended return by printing out and mail Form 1040X. Later this summer, the IRS will begin allowing taxpayers to file amended returns electronically via online tax software providers. This post has been reviewed for accuracy by Thomas C. Corley, CPA. See Business Insider's picks for the best tax software » The IRS isn't going to punish you for making a simple clerical error on your tax return. In fact, if the IRS finds minor mistakes on your tax return, they'll often correct them for you. And if they need more information or additional documents, they'll reach out to you via US mail. For errors beyond basic arithmetic, you may need to file an amended federal tax return, or Form 1040X. The amended tax return deadline if you're claiming a refund due to the changes is the later of three years from your original filing date or two years from the date you paid the tax due. This includes any elected extensions. Other common reasons for filing an amended return include claiming a deduction or credit that you overlooked initially or receiving an adjusted W-2 or 1099 from your employer that changes your tax liability. This doesn't often happen at large companies, but may be more common with smaller employers with in-house bookkeeping. The IRS reports that, nationally, the average taxpayer filing an amended return spends nine hours preparing and mailing their forms, though the time burden varies depending on the type of taxpayer and whether they seek professional help. How can I file an amended tax return? Unfortunately you can't file an amended return electronically — yet. The IRS announced on May 28 that it would begin allowing taxpayers to file amended returns through online tax services later this summer. Until then, you'll need to print, fill out, and mail the form to the IRS. You can find the latest instructions here. To complete Form 1040X, you need the following: A copy of the return (Form 1040, 1040-NR, or 1040-NR EZ; or 1040A or 1040EZ for previous years) you are amending, plus any relevant forms, schedules, or worksheets you previously filled out Any notices you received from the IRS on adjustments to that return Instructions for the return you are amending that correspond to the year in which the original return was filed — you can find these on the IRS website You should also check with your state's tax bureau to find out whether you need to file an amended state return as well. How do I mail an amended tax return? To mail your amended tax return to the appropriate address, check page 18 of the 1040X instructions guide. The address corresponds to the forms you're amending and the state you live in. Is there a penalty for filing an amended tax return? Interest and penalties for late payment of taxes may be charged, but there aren't any fees or penalties associated with simply filing an amended tax return. You can check out the IRS instructions for more details. What's the amended tax return refund timeline? The IRS says it usually processes amended tax returns within eight to 12 weeks of the mailing date, though it could take up to 16 weeks or longer, particularly in cases of identity fraud. Beginning about three weeks from the date your return was postmarked, you can use the Where's My Amended Return tool on IRS.gov to track its status. To do so, you'll need to provide the following information: Your taxpayer identification number or Social Security number Your date of birth Your ZIP code or postal code The status of your amended return will move from received to adjusted to completed. If your return is adjusted, there will usually be a new refund issued or a tax balance due. More tax day coverage: When are taxes due? How to file taxes for 2019 Should I do my own taxes? Credit Karma vs. TurboTax Where is my tax refund? Join the conversation about this story » NOW WATCH: Why Pikes Peak is the most dangerous racetrack in America
Everything we know about the coronavirus stimulus checks that will pay many Americans up to $1,200 each
Part of the $2 trillion stimulus package from the US government is one-time cash payments of...Part of the $2 trillion stimulus package from the US government is one-time cash payments of up to $1,200 to Americans who qualify. Those payments — coronavirus stimulus checks, if you will — will be paid automatically to Americans with Social Security numbers. If you filed taxes in 2018 or 2019, or you don't file taxes but do get Social Security payments, you don't have to do anything to get a payment. If you don't file taxes or get Social Security, the IRS has mentioned it will set up a "simple web portal" to submit your information, though details on that are still coming. In the meantime, TurboTax has launched its own free web portal to submit direct deposit information to the IRS. Americans who have set up direct deposits should get their payments by mid-April. Americans who are receiving paper checks may have to wait considerably longer. Read more personal finance coverage. When President Donald Trump signed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, into law, he initiated a $2 trillion stimulus package, the largest emergency relief bill in American history. Part of that package is one-time cash payments of up to $1,200 to Americans who qualify. An extra $1,200 is always welcome. But with the announcement of the cash came the questions: What is it? Who gets it? How much will I get? Is it taxable? What do I have to do to get it? Below, we've answered those questions and more. Read on for everything you need to know about your coronavirus stimulus check. What is a coronavirus stimulus check? The payment — which the IRS is calling an "economic impact payment," the government has named a "recovery rebate," and many people are calling a "stimulus check" — is technically an advance tax credit meant to offset your 2020 federal income taxes. Am I going to get a check? You will get a check if you: Have a Social Security number. Have filed taxes in 2018 or 2019, or don't earn enough to file but receive Social Security payments. Earned less than $99,000 for single filers, $136,500 for heads of household, or $198,000 for married filers according to the most recent tax return filed. Are not claimed by someone else as a dependent. How much will I get? The IRS bases the amount of your payment on the adjusted gross income (AGI) listed on your most recent tax return: 2018 or 2019. The maximum payment is $1,200 for single filers with an AGI below $75,000 or single parents (heads of household) with an AGI below $112,500. Married couples who file jointly and have an AGI below $150,000 will get a total of $2,400. Payments will begin to phase out at a rate of $5 for each $100 over the AGI threshold before ceasing at an AGI of $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. There's also an additional $500 allotted to parents who have an AGI within the phaseout range for each child younger than 16. You can use an online calculator to figure out how much your check will be if you're unsure. Do I need to do anything to get a stimulus check? You do not have to sign up to receive a stimulus check. The process is automatic for most Americans who qualify. To get a check, you must have a Social Security number (nonresident aliens, people without a Social Security number, and adult dependents are not eligible). If you filed taxes in 2018 or 2019, that tax return must reflect an adjusted gross income below $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers. Note that if you've moved, and you haven't provided the IRS with direct-deposit information, you should make sure the agency has the correct address on file to receive a paper check in the mail. If you don't file taxes but do get Social Security payments, the government will use that information for your payment. If you don't file taxes or get Social Security payments, the IRS has announced it will set up a "simple web portal" for you to submit your information on (more to come on the details of that). On Saturday, TurboTax launched a free web portal for people who don't file taxes to submit direct deposit information to the IRS, although a PR representative for TurboTax confirmed to Business Insider that its stimulus registration web page is not the web portal to which the Treasury had previously alluded. Who won't get a stimulus check? Dependents older than 16, people without a Social Security number, and those with incomes above $99,000 (or $136,500 if you file as a head of household) won't get a stimulus check. How will I get the money? Most people will get the money deposited directly into their bank accounts. People who do not set up direct deposits with the federal government will be mailed a paper check. People who don't file taxes but do get Social Security payments will get a payment the same way they get their Social Security payments. People who don't file taxes or get Social Security payments will need to send the IRS their information through a "simple web portal" (more details to come). They may also use TurboTax's free web portal to submit direct deposit information to the IRS. When will I get my stimulus check? "If we if have your information, you'll get it within two weeks," Treasury Secretary Steven Mnuchin said in a White House press briefing, according to The Washington Post. "Social Security, you'll get it very quickly after that. If we don't have your information, you'll have a simple web portal. We'll upload it. If we don't have that, we'll send you checks in the mail." For taxpayers who can use direct deposit, the payment should be deposited mid-April. However, NBC News reported that for Americans who haven't set up direct deposits with the federal government, it could take much longer: up to five months for about 60 million Americans to receive a paper check. Business Insider's Bryan Pietsch wrote: "In early May, the IRS will send out paper checks to those without direct deposit, and it could take around 20 weeks to issue all of the checks, the report said. Those with lower incomes will reportedly be prioritized, and those on Social Security will receive their payments as they would their Social Security checks." Read more: Where is my stimulus check? Here's when your payment should arrive How does the IRS know where to send the money? In most cases, the IRS will take direct-deposit information or a mailing address from your most recent tax filing. For people who receive Social Security payments but don't have enough income to file taxes, the IRS will use the information from the Social Security payments. If neither of the above situations applies to you, but you qualify for a payment, the IRS has said it will set up a "simple tax return" in an online portal, through which you'll be able to give the IRS your contact details. More information is coming on this feature. Those who want to submit direct deposit information to the IRS may also use TurboTax's free web portal. Is the money from the check taxable? No, the money is not taxable. What if my 2018 income qualifies, but my 2019 income doesn't? The IRS bases the amount of your payment on the AGI listed in your most recent tax return: 2018 or 2019. In some cases, when your income changed between 2018 and 2019, your 2018 income might qualify for a larger payment than your 2019 payment, or perhaps it might qualify for any payment while your 2019 does not. In that case, because the IRS has extended the federal tax filing and payment deadline to July 15 (all states that tax income have also their deadlines, in most cases until July 15), you could hold off filing your 2019 income taxes until after the IRS has issued your payment, forcing the organization to use your 2018 income for your payment. Waiting to file has a few downsides, like waiting longer to get your refund and giving identity thieves more time to try and prey on your taxes. However, Riley Adams, a public accountant, previously told Business Insider if you'd qualify for a stimulus check under your 2018 income but not at all under 2019, it might be worth holding off filing for a few weeks (assuming you haven't already). What if I owe back taxes right now? You'll still get a check if you qualify. These payments are treated differently than your tax refund. Typically, you can have your refund seized if you owe back taxes, but that's not the case here. Even people with tax debt should be getting a stimulus payment if they're under the income thresholds. The only people who could get their check reduced because of debt are parents with outstanding child support. I got a phone call, email, or Facebook message about my check. Should I answer? No. The US government isn't calling, emailing, Facebook messaging, or otherwise contacting you about your stimulus check — and if someone does, it's probably a scam. The IRS generally gets in contact with taxpayers through snail mail, and in the case of stimulus checks, it doesn't need to contact you for any type of additional information. The process is automatic for any American who qualifies. If someone is calling or emailing you to confirm personal details or asking for bank information or money, it's a scam. Unfortunately, scammers are taking advantage of this opportunity to steal people's identities, money, or both. These scams include fake stimulus checks that arrive immediately with an unusual denomination and ask you to verify the receipt online, as well as someone claiming that paying a "processing fee" will get your money to you sooner. What if I get my check and it's too big? You don't need to do anything. Remember: Technically, this payment is a tax credit. A tax credit reduces your tax bill on a dollar-for-dollar basis. It is one of the last steps in calculating your annual tax liability and can be claimed regardless of whether you itemize your deductions. Some tax credits, like the coronavirus recovery rebate, are refundable. That means you'll still get the money even if you don't have enough tax liability to offset it. There aren't any clawback provisions outlined in the law, so you wouldn't be expected to repay any of the money if you wind up getting too much. What if I get my check and it's too small? While it won't help you today, experts say the IRS will allow taxpayers to reconcile underpayment on next year's tax return. "If you should have gotten a check and didn't, or if you should have gotten more than you did because the IRS didn't know something important (like you have a kid), you should get more money" next tax season, Kelly Phillips Erb, a tax lawyer, wrote for Forbes. Read more on managing your money in this tumultuous time: 3 options for people struggling to pay their mortgage during the global health crisis 4 reasons to get disability insurance, even if you don't think you need it If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more Join the conversation about this story » NOW WATCH: Tax Day is now July 15 — this is what it's like to do your own taxes for the very first time
As coronavirus spreads, the $2 trillion economic relief bill makes donating to charity more convenient than ever
President Trump signed a $2 trillion relief bill into law on Friday to help ease the...President Trump signed a $2 trillion relief bill into law on Friday to help ease the financial burden American workers and businesses are experiencing due to the coronavirus pandemic. The bill contains one provision that incentivizes Americans to help others in need: a new above-the-line charitable tax deduction. Beginning with 2020 tax returns, taxpayers will be able to claim up to $300 in cash contributions to charity as a deduction without itemizing. Read more personal finance coverage. A $2 trillion stimulus package, the largest emergency relief bill in American history, was signed into law on Friday by President Donald Trump. The legislation brings much needed financial assistance to American workers and businesses and bolster the economy amidst the fallout from the coronavirus pandemic. The bill's banner provision provides one-time direct payments of $1,200 to Americans who earned less than $75,000 according to their latest tax return, and reduced checks to those who earned less than $99,000 or $198,000 if married filing jointly. There's also a $500 payment per child for parents. But there's another benefit outlined in the bill that incentivizes Americans who are in a position to help others in need: a new above-the-line charitable deduction. Taxpayers will be able to claim up to $300 in cash contributions made to a nonprofit charity this year as a deduction from their gross income if they take the standard deduction on their 2020 tax return. This deduction will ultimately reduce the amount of your income that's taxable. Usually taxpayers who want to claim charitable deductions need to itemize. Ever since the standard deduction amounts were increased under the 2017 Tax Cuts and Jobs Act (TCJA), fewer people have been able to itemize deductions. In 2019, the percentage of taxpayers itemizing their deductions fell by more than half, according to estimates from the Tax Foundation. The coronavirus pandemic has impacted nearly every sector of American life, from healthcare to the restaurant industry. If you're looking to donate, Charity Navigator has a list of the highly-rated charities currently responding to the crisis. Just make sure to keep all your electronic or paper receipts or have bank records showing the date and amount of your contribution. More tax day coverage: When are taxes due? How to file taxes for 2019 Should I do my own taxes? Credit Karma vs. TurboTax Where is my tax refund? Join the conversation about this story » NOW WATCH: Most maps of Louisiana aren't entirely right. Here's what the state really looks like.