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Filing Taxes the Easy Way

Filing income tax returns on your own may sound like a daunting prospect to many people. However, it need not be. All you really need are the right tools to facilitate things, and if you know which tools to use, you can finish even rather complex returns in a matter of two or three hours.

turbotax free editionFor most people, a tax preparation software program will be an absolute necessity if they are planning to file their own returns. That's because for non-professionals, it's simply too much work to read through the IRS instructions and complete the forms on their own. A good program like Turbotax, on the other hand, will allow you to complete your returns much more easily by simply answering a list of questions. Granted, the "interview" portion is quite long, but this format is a lot easier for most people to work with.

Despite the fact that a program will do the heavy lifting for you, you'll still need to have the required forms on hand. This includes W2s and any statements from brokerage firms or banks. Depending on whether or not you own a business or have more complex investments, you may also need K1s and other forms that denote any gains or losses you had for that year.

There are many different Turbotax editions you must choose from. People with straightforward returns may be able to file their taxes completely free using the Turbotax free edition, which you can get from http://freetrialspot.com/turbotax.php. Others may need to pay anywhere from $30 - $70, depending on how complex their returns are. Fortunately, if you use Turbotax online, you need not choose an edition at the outset. You can simply start your returns online, and when the return is complete, the program will tell you what level of software you'll need to purchase to finalize and send your forms electronically. Regardless of the edition you purchase, the cost will still be significantly lower than what you would have ended up paying had you gone to a tax preparation firm.

In addition to Turbotax, there are a couple other tax preparation programs you may want to consider. One is TaxAct, which I have not used in a while. I would note, however, that when I did use this program (although it was quite a few years ago), I found it to be much less user friendly when compared to Turbotax. Because of this, I simply stuck with Turbotax over the years since I knew I would be getting a product that is not only reliable but easy to follow.

Even though it's possible to complete just about any kind of return with Turbotax, you may still want to hire a professional if your tax situation is very complex in a given year. This may include things like losing a significant sum of money to investment scams. In these types of cases, a good CPA may be able to suggest creative methods to reduce the amount of taxes you owe. Such options may not be possible if you use a software program, regardless of how good the program may be.