(ARA) – New for tax year 2010, the IRS is no longer automatically mailing tax forms to taxpayers. This move is expected to save the IRS $10 million. If it encourages more people to electronically file (e-file) tax returns online, it also will save the IRS time and taxpayers as well.
This income tax return filing season, taxpayers should be asking themselves what they can do to save time and money.
“Most people probably spend more time dreading their taxes than it would take to actually do their taxes and get back to the things they enjoy,” says Gary Lundberg, product management director for CompleteTax, an online tax preparation and e-filing software program. “They may end up waiting until the last minute and rushing through the process only to spend more time and money than they should.”
A few things people can do to save time and money this tax season include:
1. Get ready. Spend a few minutes up front to gather the information you need to do your taxes, for example, the W-2 form from your employer and any 1099 statements from your bank or other financial institutions.
2. Start early. Historically, prices for tax software go up as tax season progresses. Starting early can help you save money. Check to see if your program guarantees that the price will remain the same from the time you start doing your taxes to the time you finish.
“When you start preparing a tax return online, you want the reassurance that you can come back a few days or weeks later to finish up without it costing you more,” says Lundberg. “You’ll want to look for an online tax preparation solution that guarantees not to change prices on you after you start a return.”
3. Use the tax program that’s right for you. Unlike packaged software that you have to purchase and install, most online tax preparation programs let you try them out before requiring you to pay. So, if a program seems complicated, move on to one that’s simpler.
“Those who are unhappy with the price or performance of their current tax software should also shop around. You may even get a free return for switching,” says Lundberg. “But be sure to look for guarantees.”
4. Get the help you need. Different taxpayers want different types of help. So, it’s important to ask yourself what type of support you expect. For example, do you want to reference or search an online tax guide on your own, chat with customer support or have the ability to speak directly with a tax professional if you have a question? Then make certain your tax program offers the help you expect you’ll need.
“You’ll want a program that offers affordable access to a tax expert to provide tax help if, when and where you need it,” Lundberg says. “Even if you don’t think you’ll have questions, it’s a good to know it’s there just in case – but steer clear of those that charge per question or per session.”
5. Claim all the tax credits and deductions available to you. The average federal tax refund for 2009 was about $3,000. Still, many taxpayers believe they may not be realizing all the tax breaks they should be getting. The interview process in the online tax preparation program should help make sure you are maximizing your credits and deductions and some will even guarantee they are providing the maximum tax refund. Also, make sure the program includes charitable deduction tools to help you substantiate the value of goods you give to charity so that you can claim the full charitable contribution deduction you deserve.
6. Don’t pay more than you have to. Depending on what your tax situation is, you may be able to prepare your federal tax return for free. For example, programs like CompleteTax offer a basic version for free, as well as free use of higher-end programs for people who were unemployed in 2010 or owe the IRS on their 2010 returns. Even if you have to pay, it should cost less than $60 to prepare a federal and a state tax return.
7. E-file and use direct deposit. About 70 percent of taxpayers e-filed last year, with about 35 million people doing so from their home computers. It’s easy, secure and accurate. And, if you e-file your tax return and choose direct deposit, you can get any refund coming to you in as little as eight days deposited right into your account.
Find more money- and time-saving tips on tax preparation at www.CompleteTax.com.
