It’s no secret that nowadays folks are scrambling to save a buck wherever possible. Even though many Americans over pay their taxes and expect some level of tax refund, the promise of a few thousand dollars should not negate the fact that you need to do your homework in order to save money when possible. The sweet spot in all this is the point where the tax refund, tax preparation costs and the nasty possibility of long term IRS penalties and fees due to error all balance out nicely. Don’t be a robot and just do what you’ve always done year after year. Who knows what you can be missing out on or even getting yourself into! And, for heaven’s sake don’t just do something in particular because that’s what your mama used to do OR because that’s what’s working for your neighbor! Make the decision based on your individual situation in the isolated tax year being analyzed.
In all scenarios described below, I would only recommend these methods if you have a straightforward return (standard W2, investment or bank interest/dividends, basic primary home ownership or renter), etc. Honestly if you work from your home, sell any real property or investments, work as a consultant paid via 1099, have unusually high medical bills, filed bankruptcy, endured foreclosure, have a dependent in college, received an inheritance, etc, etc, etc… then just find yourself a good CPA. That person will know what you can and can’t deduct. At that point its worth having someone who is knowledgeable of tax code and can bend things in your favor! So, don’t be cheap.
Back to the majority of Americans:
If you have adjusted gross income or AGI of less than $58,000, which is approximately 70% of all taxpayers, you can prepare federal tax returns for free using the IRS’s Free File program. It’s a fast and safe service, which allows you to track your refund within 72 hours of filing. Note, however, that this does not necessarily include state returns which you will still be responsible for filing.