After a brief hiatus from our series on taxes, we're back with a new article about how to make the process incredibly simple. In the past, filing your taxes required getting together a ton of paperwork, filling out forms by hand, tallying up all the numbers, and sending in the proper documentation. No longer. Today, over 80% of tax returns are filed electronically, either through a tax professional or with independent software. And the amount of people filing those taxes on their own is on the rise.
For young people, downloading free federal tax software is a must. There is no cost to it, as long as you earn below roughly $50,000, and if anything, it is another resource that could be used in conjunction with something like professional advice. Here are a few other reasons to use free federal tax software:
Tax preparation software helps you avoid mathematical errors. As silly as it sounds, one of the easiest ways to get the IRS to audit you is to make a mistake in your arithmetic. For example, if a business reports that it paid you $3300 across a series of checks, but you mess up in your addition and only report $3100, you’re going to set off an automated red flag. When that happens, you’ll likely be on the hook for taxes on the $200, plus penalties—not because of any intent to deceive, but simply because you added the numbers incorrectly. Why take the risk when software is so readily available to you?
Although calculators can and should solve this dilemma, filing taxes by hand carries other mathematical risks, too. For instance, if your handwriting is difficult to read, it is possible that the IRS could misinterpret a certain figure. If your notes about certain deductions and where they stem from are sloppy, the IRS could ask to see further documentation. As avoidable as some of these mistakes seem, people are audited every year for them. Avoid being one of those people, and just use software instead.
Tax preparation software educates you about the tax system. Over the course of doing your taxes, you’ll be prompted with a series of questions and clarifications that will help explain what factors tie into your tax bill. For example, if you weren’t prompted with a question about your car mileage for business purposes, would you know that you could potentially claim a deduction for its use? Would you know that certain expenses, such as business meals, are deductible for certain kinds of jobs?
While tax preparation software might not educate you as well as shelling out for a tax professional would, it is far preferable to learning the tax code entirely on your own. Plus, many free tax services, such as the ones I’ve highlighted above, now offer around-the-clock customer support where you can get much of the tax professional service, all without leaving your home. Technological advances have made it much easier to learn about taxes than it was previously, and you should take advantage of those advances.
Tax preparation software provides you with automated records and easy tax filings. Whereas in the past, you likely would have had to photocopy your tax return and store it away for the future, now you can take care of that process with the click of a mouse. You can easily download your tax return and store it in a secure location, never having to worry about misplacing it or losing it in the course of, say, summer moving.
Another advantage of tax preparation software is that it makes filing your taxes incredibly simple. This past year, I was able to pay from the comfort of my own bed by just entering my credit card information—no need to print out the forms, find an envelope, or mail anything by a certain date. I had the ease of mind of watching my submission go through, and I received a notification from the IRS that my tax documents had been received. What could have been a stressful waiting game of hoping that my envelope was received was instead an instant approval. The issue was out of my hair, and I no longer had to worry about it.
Taxes used to be complicated and difficult for young people, but the availability of free tax preparation software has changed that. Using programs like H&R Block's free software helps to avoid mathematical errors, teach you about the tax system, and make it simple and convenient to file electronically. Using these tools, there is no reason to be concerned about paying your yearly taxes.
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