General tax suggestions for a complete tax newbie

This is embarassing really. I’ve never done my own taxes. For one reason or another my parents (my mom mostly) have always handled them for me as she has easy access to a lawyer and all that good stuff. Well it’s about time I start doing this for myself. However I’m completely lost.

I don’t know ANYTHING about taxes. Don’t know how to get the forms required, don’t know what the forms are called. Don’t know when to send in my form by, don’t know where the forms go!

So my questions are:

  1. Are there any online sites that will guide me through filing my taxes online for a fair fee? Would you recommend any specific cites?

  2. Should I instead go to one of the walk-in tax places (see how little I know?) like H&R Block?

  3. Any tips for my first time filing taxes on my own?

IRS website:

You don’t say what your situation is, but I’m guessing it’s probably simple. Are you single? Do you own a home? Do you have investments?

If you’re single, just renting, and the only money you get is from your job, you probably shouldn’t bother wasting money with H&R Block - you can probably get away with filing a form 1040EZ, which takes hardly any time at all.

The form you file with the IRS (Federal Return) is some form of Form 1040. There are a few different versions (1040, 1040A and 1040EZ), and the version you pick depends on where your money comes from and where it goes.

You’ll also (probably) have to file a state return. I don’t know anything about New Jersey, but they probably have a state franchise tax board. (In CA where I live, I go to the CA Franchise Tax Board for forms and information)

Forms are due April 15, but you can file an extension if you need more time. Note that if you think you owe any money, you have to pay on 4/15, but the extension allows you to send in the forms later.

Since your mom knows what’s been done for you in previous years, can she sit with you for an hour or so and walk you through things? It’s truly not hard, you just need to know where to go for the basics.

The most difficult thing about filing taxes is collecting all the paperwork necessary. Obviously you need your w-2s. You also need the 1099s from the bank indicating how much interest they paid. If you bought and sold stocks or other financial instruments, you need those statements. If you paid mortgage interest or property taxes, you need that paperwork. Once you get all your ducks in a row, it really isn’t all that difficult (there are, of course, many exceptions to this, but you don’t sound as if they might apply to you).

I recommend (and used myself) Turbo Tax online (which is conveniently advertised below). They will step you through the whole process and their help will answer many of your questions. You can also file electronically, which is convenient. However, as another poster pointed out, if you qualify for the 1040ez, save yourself a couple of bucks & do it yourself.

Another thing to be aware of with doing it online is the security aspect. It does not particularly bother me, but you are putting your data out there in cyberspace and that is not without some risk (however, just sending your stuff through the mail is not without risk).

Most of the forms you need should just appear in your mailbox and I would be concerned if they aren’t there already. You need W-2’s, any bank statements for accounts that earned interest, maybe rent payments, tax payments or refunds you made last year etc. Most of that stuff just comes in the mail about the end of January - Early February.

I would guess your return is pretty simple and I would recommend doing it yourself. A simple return just requires Turbotax or another program walk your through entering the values on your forms in the correct places. The forms are standard and are conveniently marked box A,B,C for you to enter.

You will probably take a standard deduction available to everybody and appropriate for people that may not have a lot of deductions on your own. The program calculates the taxes you owe and compares that to the taxes you had deducted from your checks. If you are like most people, you will get a refund.

You just tell the program to file electronically, give it your bank account info for deposit or to pay owed taxes, hit submit, and then check back in a day or so to see if your return was accepted as is (it usually is). Then, it will tell you a date to expect your refund and that is the end.

The handy part of using software is that the information will be there next year and some of it can be reused if you need to greatly reducing the time to do future returns.

If you decide to take the paper route, your local library (and post office) should have all the tax forms you need. That’s where I went the first time I had to pay. The librarian helped me choose what I needed, too.
I use online software now because I like the ease of it. I can’t miss anything that way.

I’d get copies of the tax forms from the library, and look them over. I’d only go the TurboTax route if they seem intimidating. I love the program, but our taxes are probably a bit more complex than yours.

And do the federal taxes before the state. It’s been 10 years since I’ve done the NJ forms, but I’m pretty sure they ask you to enter data from your federal 1040 or 1040 EZ. Once you do the federal one, it’s easy.

Taxes for my kids take about 5 minutes to do. I do them on TurboTax, but only because we have it already.

  1. I use Turbo Tax online, it costs about 30 bucks for federal, and I think another 10 or so for state.

  2. Unless your return is really difficult, I wouldn’t use H&R Block. I used them last year, our taxes weren’t too difficult, but we had just moved out of state, new jobs, new baby, new house. It cost about $400 from them, and really I could’ve done them myself (I would’ve if I had any idea how much H&R Block had cost. I had major sticker shock when I saw the fees).

  1. Assuming your returns are fairly simple (wage income, interest income, lived in one state the entire year, maybe some IRA deductions), they should be pretty easy, and you can’t go wrong with Turbo Tax (IMO). I’m sure the other online reputable filing companies are just as reliable. They ask you questions in plain language, and provide links if you are unsure of the question. If your return is simple, I can’t imagine it taking more than a couple hours if you have all the forms, even for a first timer.

The IRS website also has a whole list of tax software that you can use for free if you qualify… and the big qualifier seems to be an income of less than $50,000. Check here for all for all the details.

I have used Turbotax online many times and recommend it.

No one seems to have answered one part of your question:

Taxes are always due by April 15. Except this year, April 15 is a saturday, and taxes are always due on a business day. So, you get 2 extra days; they are due April 17. But keep April 15 in your mind, it is the “standard” date by which everything must be submitted.

You sure about that? :stuck_out_tongue: Okay, I didn’t account for the weekend this year. :smiley:

To the OP…is this helping? We haven’t heard anything from you.

Assuming you are very sure that you are owed a refund, the IRS doesn’t give a rat’s ass when you file. Any penalties are based of the amount of past due taxes. No taxes due = No penalty.

I am pretty sure Cecil did a column on this once and I have been months late myself in my single years and the IRS doesn’t even acknowledge that you did anything wrong at all you just get your check.

If you get TurboTax (which I recommend) or something similar, it will fill out a 1040 for you. Some versions of TurboTax will do state taxes as well as federal.

It’s called the Division of Taxation in New Jersey.

Don’t try to go to a post office on the 17th to send in your taxes (what counts if you send in paper forms is the postmark on the forms). Everybody and his brother will be there, so you won’t be able to find a parking space and the lines will be unbelievable. Either file online or send off your taxes before the due date. You don’t have to go to the post office to send in paper forms- you can just drop them in your mailbox, if you’re not right up against the deadline.

If you’ve lost any of those forms or didn’t get them, you can go to HR at your job or call customer service at your bank and get another copy.

I thought about mentioning this except I decided it muddies the waters. In point of fact the OP has not ever done taxes before ergo s/he is not certain of anything in relation to his/her tax liability. The only way the OP would know if s/he was owed a refund would be… by completing a return! Ergo, s/he should expect to file April 15 this year. Perhaps in future years s/he could make another determination.

D’oh! April 17. I should read my own posts or something.

I’d still recommend taking a shot at filling out the forms by hand. First of all, pain is good for the soul. :slight_smile: Seriously, though TurboTax is great, there are some things it does not do well. My wife is self-employed, and does a SEP every year, and the only way I’ve found out to do it on TurboTax deluxe is to go to the right form and click on calculate max SEP allowed. You’ll never get to add it by just doing the interview. Doing it by hand, especially when it is easy, should help one check the tax forms generated by TT for plausibility.

Even if the taxes are so easy this year that this isn’t an issue, later on it will pay off.

Wow guys, this is a lot of good info, thanks so much for your comments and suggestions. I’ll be spending my time tonight after work going over everything everyone has said.

Wish me luck!

And on that note, where I to make a mistake how much trouble could I get into? They got Al Capone on tax charges man, I have a feeling the government won’t care that it was my first time. How error proof are the solutions you guys suggested?

And there is one complicaiton that you guys might be able to help me with. Foir the most part my situation is rather simple. Single guy, renting, lived in same city and state during the past few years. Worked a single job for most of last year, no other income or investments, hardly any money in the bank (that’s going to change this year :wink: ). However for about 3 months early last year I had a terrible job as a courier. I earned maybe 4k doing this but the cost of buisness was incredibly high! I had to use my own car and in terms of gas, mileage and tolls I actuallt came away with less than half of what I made. I don’t want themt o tax me based on the 4k only. They need to see my costs, right? The job required me to essentially sign up as my own business (they did not deduct taxes from my paycheck).

How much does this complicate my situation?

Thanks again, guys.

It complicates things a little and it means you should use tax software to get it right. It still isn’t that bad though.

Turbotax interviews you on most deductions to make sure you get the right ones. It usually just gives you a brief overview of the deductions and asks you Yes or No if you qualify. If you are not sure, it will provide much more info or a more detailed interview.

Turbotax won’t get the math wrong and it runs error checks for things that seem out of line. For such a simple return, your chance of being audited is probably really, really low so I wouldn’t worry about that much.

You don’t always have to have even single receipt for very penny spent. You really have to estimate on things like mileage unless you have a cab meter in your car that you start and stop religiously. Smaller charitable deductions (under some hundred dollars) don’t require receipts either. Just estimate the best you can and try to be pretty honest.

Just answer the questions the best you can, have some evidence to substantiate what you deduct, and you will be fine.

They got Al Capone (and some other people) on tax charges because it would have been too hard to prove his involvement in more serious crimes. You’re not going to get in as much trouble as Al Capone did, unless you’re involved in racketeering or drug dealing or illegal gambling or something like that.

And you’re not going to get sent to Alcatraz unless you pay up for the tour. :smiley:

That might mean you will owe money, instead of getting a refund (depending on how much of your income came from that courier job). Mr. Neville doesn’t get taxes deducted from his paycheck (long story). When I was single, I usually got a substantial tax refund, which made me dread doing taxes just a little less. But now we have to pay. :frowning: This is good in that we are not giving an interest-free loan to the federal or state government (neither of which we are currently fans of), but it does make me dread doing taxes just that little bit more.