HE
Heidi Esau
3 months ago

A Field Guide to Nav.ing Your Taxes

I’ll admit it—tax season gives me the nervous sweats. I get anxious that I’ll miss something important, especially when I close in on the deadline before even taking a look at my W-2.

This year I decided to educate myself on all things taxes and break it down into easy manageable steps. Since I believe in sharing the wealth, I’ve compiled my learnings into a tax guide so you can get your taxes done like a boss and get back to your birthright of Netflixing. 
 
In 2019, the general deadline to file is April 15. That date is fast approaching, so let’s get started. 
 
Gather your documents.
First things first, find your W-2 (this might be the hardest part). If you’re traditionally employed, you should have received it from your employer back in January. You’ll need to report your individual income on form 1040, and if you have a side hustle (kudos, girl), but you’ll need to fill out form 1099 as well. You may need several other forms to report your deductions (more on that later). 
 
Be a freeloader.
Download the Free File Software at IRS.gov. If your income is below $66,000 you can use the free software instead of forking money over for some commercial software or tax preparer. And you get the added satisfaction of knowing you did it yourself. You’re a strong, independent woman who don’t need no TurboTax. 
 
Get some easy credit.
For as much as we complain about Uncle Sam, there are many ways he (read: the government) gives back, and that’s especially true when it comes to tax credits. Increase the amount of your refund based on your dependents, health care, education, and so much more. 
 
Determine whether to itemize your deductions.
Deductions reduce your taxable income, so more deductions are better. Choose the method that provides the highest possible deduction list. Most tax software will help you make this decision.
 
Standard Deduction: This one is easy peas-y. Just take the standard deduction based on your marital status and household size to reduce your taxes. Voila!
 
Itemized: Some people don’t qualify for the standard deduction and therefore should itemize. Popular itemized deductions include but are not limited to:
  • Property tax: When you pay your local government, your federal government pays you back!
  • Charitable donations: Like all the clothes you donated to Goodwill that could never see the light of day at your fresh-out-of-college professional job.  
  • Student loan interest: The one time you might feel good about debt, right?
  • Mortgage interest: Hopefully your refund helps you upgrade from a futon to a real bed, now that you have a place to call your own.

Get your refund fast.
For a speedy refund, set up direct deposit and then e-file. Filing electronically ensures the fastest possible refund and if you  set up direct deposit, the cash money is sent straight into your account. 
 
Listen up, self-employed folks.
If you have a small business or are an independent contractor (think Uber driver, AirBnb rent), you must file your net earnings if they are $400 or more. Self-employed individuals report income annually like everyone else but must pay an estimated tax quarterly.
 
Beware of the tricksters. 
Some of these scammers can sound legitimate but are only looking to take away your hard-earned dollars (and that’s only for the government to do). Review IRS’ Dirty Dozen Scams so you don’t find yourself in a sticky situation when you make that last-minute Hail-Mary attempt to make the deadline.
 
Going...Going...Gone.
If you’re really not ready to do your taxes and you won’t make the April 15 deadline, you can file for a six-month extension. Be aware that penalties and interest may apply to money you owe after the deadline.
 
Price it Out: Most Popular Tax Prep Software
 
  • TurboTax Deluxe ($39.99): The standard TurboTax offering is totally free, buuuuut it’ll cost extra for every “abnormal” tax topic you need to address (e.g. if you have freelance work, need to file taxes in more than one state, or have any investments). Normally $60, the deluxe version of the most widely-known DIY tax software is available for a 33% on Amazon right now!
  • H&R Block ($29.49): Like TurboTax, the skeleton version of H&R Block is free, but the more complicated your tax situation, the costs go up. However, H&R Block offers more tiers of products for your specific tax situation. The deluxe version of this one is $24.49, premium is $37.49, and self-employment filing is $59.99 (plus $36.99 per state filing for all types).
  • TaxAct ($29.95): Offering the most options of the most popular tax prep choices, TaxAct has five options: free (for the most basic taxes), $9.95 for basic (if you have dependents or college expenses), $29.95 for deluxe (best for homeowners or those who qualify for lots of credits), $34.95 for premier (best for investors or real estate owners), and $49.95 for self-employed. 
 
Still feeling unsure about this whole taxes thing? Same. Find out more about nav.igating the world of taxes (like whether you should DIY or hire a professional, and what to do with that tax return money once it comes in) by downloading the Nav.it app today!