Are you one of the 33% of Americans who wait until the last minute to file taxes online or through the mail? If you want to make a change, you should consider how to file your taxes. Then, you won’t have to wait until the last minute, and you can keep from having to rush to file on time. Instead, you can file early and know everything is correct. Read on to learn more about “How to Do Your Taxes Online in 2022”
Research Online Tax Filing Websites
One of the first things to do when filing your taxes online is to research tax filing websites and software. TurboTax is a popular option for individuals and small business owners.
It’s a convenient option if you use QuickBooks for bookkeeping because you can transfer all of your transactions. However, you can also use software from H&R Block, TaxAct, and TaxSlayer.
Even the IRS offers free tax filing online, and you can get help if you made less than $73,000. If you made more than that, you can file with the IRS website, but you won’t have access to help.
Consider Live Help
As you compare tax filing websites, consider if you may want live help. Some programs, like TurboTax, offer tiers that you can pay more for to access a tax expert as you file online.
Accessing a tax expert can be an excellent alternative to hiring a CTA or tax attorney. You’ll get the help you need, and you can have someone answer all of your questions and review your work.
Even if you’ve done your taxes many times, it never hurts to ask for assistance. However, it will cost more, so consider if you want to spend that money or if you want to file your taxes online without the help.
Select the Best Filing Plan
Once you select the software you want to use for filing taxes online, you have another choice. Most tax websites have multiple tiers, including a free version and some paid versions.
If you have a basic return, such as income from a traditional job, you may be able to file for free. However, if you have property or donated to charity, or if you have a business, you should expect to pay.
Consider what forms you’ll need to file and if a tax filing plan covers that. Then, you won’t miss anything on your return, so you can make sure everything looks good.
Gather Your Personal Information
As you start to do your taxes online, gather your personal information. You’ll need to know your social security number and that of any dependents or a spouse if you’re filing together.
If you’re using the same tax software as in the past, you will need to remember your username and password. That way, you can log into your account, and you won’t have to waste time creating a new password.
Make sure you have all of these details ready to go when you set down to do your taxes. You can save a lot of time and finish filing much sooner.
Organize Your Tax Forms
You’ll also want to organize any tax forms you received. If you had a traditional full-time or part-time job, your employer will provide you with a W-2 that shows your income from the job.
Contractors and small business owners may receive 1099s from their clients. Anyone might receive a 1099-INT if they earned interest on an account through their bank.
If you received unemployment benefits, you can expect to receive a 1099-G. Other common forms include a 1098-T, which is for college tuition, and 1095-A, which shows the health insurance tax credits you received.
Find All of Your Receipts
Before you file taxes online, be sure to gather and organize any relevant receipts. If you work for yourself, these receipts may cover income and business expenses.
Maybe you bought a new car or truck for your business, or perhaps you bought some other piece of equipment. Keep those receipts to make sure you qualify for a deduction.
Anyone who donated to charity may want to find a donation of that receipt. People who used an HSA to cover health expenses should keep and use those receipts to prove they made qualifying purchases.
Go Somewhere Private
When you’re ready to do your taxes online, find a private spot. If possible, file taxes at home so that you don’t have to worry about a stranger snooping on your activity and capturing sensitive information.
You may want to find a spot that can fit you and your spouse if you’re filing your taxes together. That way, you can each go through your documents and keep from missing anything.
It can also help to file your taxes when everyone else is out of the home. You’ll have a quiet space to focus on inputting accurate information into your online tax return.
Verify the Site’s Security
If you’re using a new tax website, you should verify it has an SSL certificate. The security certificate shows that the website will encrypt sensitive information to help keep hackers from getting it. Its not only important to learn How to Do Your Taxes Online in 2022, but its even more important to learn how to do them safely without risking your personal information.
Most reputable tax filing programs have good security, so you shouldn’t have to worry. However, it never hurts to be extra safe and to always look at the search bar in your browser for a padlock.
Another way to verify the site’s security is to view the full URL. If the site starts with https instead of http, it will be safe for you to file taxes online.
Give Yourself Plenty of Time
You should also give yourself time to go through all of your documents as you file your taxes online. Give yourself a couple of hours or so when you go to do the taxes so that you don’t have to stop in the middle.
It also helps to start doing your taxes well before the deadline, which is usually April 15. If that date falls on a weekend, it will be the first weekday after the 15th.
The deadline to file your taxes in 2022 is April 18th since the 15th is Good Friday, and the 16th and 17th are weekend days. While you can file your taxes at the last minute, doing that can make the process even more stressful, and you may need to get an extension.
File Your Federal Return
When you’re ready to do your taxes, you’ll usually start with your federal tax return. A lot of tax websites will walk you through the process and make it easy to fill out the necessary forms.
For example, TurboTax will ask you questions in plain language. You don’t need to know complex financial or tax terms, so you can give the most accurate answers to help file your taxes.
Be sure you include all of your income and any donations or business expenses. Then, you’ll be able to finish your federal return and file it online.
File a State Return
Most states have a state income tax, so you’ll most likely have to file a state return. You might even need to file multiple state returns if you worked in multiple states, such as by performing or traveling to different client sites.
The states that don’t have income tax include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. However, you may need to file a state return if you work across state lines.
Be sure to consider where you lived and where you worked throughout the past year. Then, you can follow similar steps to filing your federal tax return.
Review Your Documents
Before you officially file your taxes, review your federal and state returns. Make sure all of the details are accurate and that you didn’t miss any income or expenses.
You may want to have your spouse look over the return, especially if you’re filing jointly. If you chose a filing plan that includes help from a live tax expert, ask them to review your documents.
Another option is to save everything and walk away for a couple of hours. You can come back to the tax software and review your return with fresh eyes, and you may catch a mistake to correct before you file.
Save a Copy
When you file taxes online, be sure to save a copy of your final return to your computer. You can then print off the copy and store it with other past tax returns.
Of course, you also have the option of storing tax documents in a folder on your device. Then, you’ll be able to reference them if the IRS audits you or if you need to compare returns when filing taxes next year.
Your return may also tell you how much you owe in taxes to your state or the federal government. It might also show you the amount of money you’ll receive.
Prepare Necessary Funds
If you find you owe taxes, you may want to go to the bank or log into your online banking account to move money around. That way, you’ll be able to set up a direct debit to pay off your taxes, or you can send a check in the mail.
You can expect to owe taxes if you have a business but didn’t pay your quarterly taxes throughout the year. If you select a paid version of tax software, you might also owe money, even if you have a traditional job.
Some tax programs will let you deduct the software price from your return. If you want to simply pay the fee and receive your entire return later, you should make sure you have enough money to pay to file now.
How Much Does It Cost to File Taxes Online?
You can file your taxes for free if you have a simple return and don’t need much extra help. However, the cost to file can be tens or hundreds of dollars, depending on the software and plan you choose. Typically Most software’s end up costing between $50 to $150 dollars for most returns
Most tax software is more economical than hiring an accountant. But you could also easily spend a lot of money, especially if you have a business and decide to get help from a tax expert.
If you’re on a tight budget, you may want to shop around and compare tax software. That way, you’ll find something that works for you financially and helps you file your taxes accurately.
When Can You File Your Taxes Online?
The IRS usually starts accepting tax returns in late January. However, you should wait until the end of the month to receive all of your tax forms from your clients, an employer, and any banks where you keep savings or investments.
You’ll need to file your taxes before the deadline, which is usually around April 15 or a few days later. If you can’t file your taxes then, you may ask for an extension.
The deadline to request an extension is the same as the normal tax deadline. If you receive an extension, you’ll have until the middle of October to file your taxes.
Is Online Tax Software Safe?
Online tax software is generally safe, especially if the software has a good reputation and if it has a security certificate. Look for a padlock near the URL to make sure the website will encrypt your data.
If you aren’t sure if you trust a website to file your taxes, keep looking. Then, you can find something that will put your mind at ease as you do your taxes online.
Can You Make Filing Taxes Even Safer?
You can request an identity protection PIN (IP PIN) from the IRS to provide extra protection. The six-digit number is one that only you and the IRS will know, so you can keep others from attempting to steal your identity.
When you file taxes, you’ll need to provide the IP PIN to prove you are who you say you are. That way, you can know that no one else will file your taxes first and collect your refund.
Will You File Your Taxes Online?
Knowing “How to Do Your Taxes Online in 2022” can save you a lot of time and money. However, the process can be overwhelming, whether this is your first year filing taxes or if your return is more complicated than in the past.
Fortunately, you can compare different tax websites and plans to choose one that works for you. Be sure to file your return before the deadline, so you can get your refund sooner.
Do you want to predict how much you’ll owe in income tax this year? Use our income tax calculator to get an estimate.