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Mar 042014
 
 March 4, 2014  Posted by  Features, Hot Deals, Money, Taxes
tax-return

If you’re looking to make this tax season easier than last year’s, or if your financial circumstances have changed, we have a list of resources for you to consider.

Online: Filing your taxes online is easy, and it may be free if your income is low enough and your financial situation has few complications. This article has a great list of online tax services.  They get more sophisticated each year, so if online tax preparation would not work for you last year, see if it does this year.

Software: If you make too much money to use an online service, or if your tax situation is a little complicated (self-employment income, alimony, etc.) , you may want to do your taxes yourself with the help of tax preparation software. All the brand-name packages are pretty good, and they are often sold with discount coupons or bonus software.

Storefront tax preparation: The quality of the storefront tax preparation services vary. Most of them train their employees in how to use tax-preparation software similar to what you can buy yourself. These companies offer refund anticipation loans. But the fees on these can be high, so if you can wait for the feds to send you the check (or, even better, use direct deposit), do.

Volunteer tax preparation:  If you want to sit down with someone who can do your taxes, without spending any money, you may be able to take advantage of free tax preparation services. Many of these volunteer programs have limits on income or types of forms filed, but they may be able to help you. Here’s an updated list of national programs. You can follow the links to local resources, and there may be additional resources in your community, too.

An accountant or enrolled agent: For more complicated situations; ask if this person deals with people like you. An accountant who deals with artists will have a better understanding of a freelancer’s income and expenses but may be as much of a hindrance as a help to a day trader, who faces a very different section of the tax code. An accountant who holds the CPA (Certified Public Accountant) designation will generally be the most expensive option – but the best value for those with complicated situations or small businesses. Many CPAs can give advice about your overall financial situation, too. An enrolled agent is someone who specializes in taxes and can represent taxpayers before the IRS. Enrolled agents may know taxes better than a CPA, but they don’t usually know other aspects of accounting.They may be less expensive than a CPA and can be a great option for someone with some tax complications who does not need other services.

By the way, many CPAs and enrolled agents use the same software that you can buy or get online. What they do is not secret, it’s just that they have experience. I use a CPA for my taxes, which are moderately complicated because of investments and self-employment income. The accountant saves me a ton of time because he knows exactly which forms to use and which questions to ask. I’m not sure he does them better than when I did them myself using software, but the faster time is worth it for me.

These options apply to federal taxes. Whether you need help with your state taxes very much depends on your state. The Illinois form is a piece of cake. Once the federal form is complete, you transfer a few numbers, pull out your calculator, and you’re done. Fifteen minutes, tops. Other states have far more complicated tax forms. State taxes can also be complicated if you have employment income from other states, say if you moved or if you live near a state border. Take a look at your state’s form before you make a decision. If it is as easy as the Illinois return is, you can pay someone to do the federal form and then finish that state form yourself.

Taxes are the cost of living in a society, and like it or not, they aren’t going away. They don’t have to be traumatic, though, and you don’t need to be rich to get them done right.

Annie Logue

Annie Logue has lived in Chicago for the better part of 30 years now. She loves to travel and find new things, whether around the globe or around the corner. She’s also long been fascinated with money; she teaches finance at the University of Illinois at Chicago and is the author of four books in Wiley’s . . .For Dummies series including Hedge Funds for Dummies, Day Trading for Dummies, Socially Responsible Investing for Dummies, and Emerging Markets for Dummies. She lives with her husband and son on the north side of Chicago, where she operates Chicago on the Cheap.

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