5 Tips for Preparing Your Own Taxes Online

If your taxes are simple (for example: you just have a w-2, or receive social security and have no dependents) and you are comfortable using a computer, then preparing them yourself online might be for you. Some of the online tax software programs are free and some of them have fees.

Tip 1: Use IRS Free File

The IRS has a free file program for anyone who makes $73,000 or less. The IRS contracts with established tax software companies to provide this service. You can choose from different tax software vendors and they all have to provide the most common tax forms you need. Note that while filing a federal return is free, the vendor may charge for e-filing a state tax return. You can see if you qualify by clicking here and check out the companies providing the service.

Tip 2: Use Franchise Tax Board (FTB) Free File

California residents can use Cal-File at the FTB website to file a tax return. Please check the website to determine if you qualify. You have to set up an online account with the FTB to use this service. Then you can access Cal-File to enter all your information (you can save an in-progress return) and once you submit it, the return is filed with the state. Note that the FTB will send out periodic notices for you to update the password. If you forget to update your password by the deadline, you have to register again.

Tip 3: Research Other Low-Cost Tax Software

There are many vendors who offer low-cost tax preparation online. You can check out this article for some reviews of these: https://www.nerdwallet.com/article/taxes/best-tax-software. Many offer free federal e-filing for most basic tax returns. However, if your return requires certain forms (such as a Schedule C for your Uber/Lyft driving or Etsy sales), that may cost more. Be sure to read carefully. Usually, the tax software is updated with the most recent updates from the IRS and State tax agencies.

Tip 4: File Early (if you can)

Due to millions of people now filing electronically, the IRS and state tax agencies get lots of returns to process. A return filed early, between the months of January and March, means you will get the refund faster especially if you have it deposited into your bank account. Another good reason for filing early is that it prevents identity thieves from trying to file a false return using your name and stealing your tax refund.

Tip 5: Correcting Mistakes

Sometimes you file a return but forget to include something. For example maybe you received a 1099 late or another family member forgot to give you a W-2 for their job. Once your tax return is filed, you can either wait for the IRS or FTB to contact you by mail about the mistake (they will never contact you by phone. Only scammers pretending to be the IRS or FTB contact you by phone) or submit an amended return that corrects it. There is also another option if you catch this before the filing deadline. You can submit a new tax return that supersedes the one you just filed. There is a checkbox used to do this when you submit the new return. If you don’t check that box on the return, it will likely not be accepted. However, if the filing deadline has passed (April 15 in most cases), you must amend using form 1040-X.

Important Links to Know

IRS: www.irs.gov

California FTB: www.ftb.ca.gov