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The IRS has begun accepting tax returns, and you can file yours early to avoid the panic of running right up to the deadline. If you’re filing your taxes online for the first time, we’ve collected all of the information and resources you’ll need to get it done quickly, easily, and inexpensively
When Is Tax Day 2021?
The last day to submit your taxes on time, generally known as tax day, is May 17, 2021. The U.S. Government has issued a one-month extension in 2021 due COVID-19.
If you fail to file your taxes before the deadline, you’ll receive a penalty which varies based on your income and how late you file. You can find a full explanation of these penalties on the IRS (Internal Revenue Service) website.
What You Need To File Your Taxes Online
Filing your taxes online requires the same paperwork that you would submit if you did it in-person at a bank, or through an accountant.
This includes your social security number, W-2 or 1099 form (Employment), and documents pertaining to any other source of income, like stocks, a pension, a trust fund, or rental properties. Having these documents ready and organized is key to filing your taxes quickly. If you’re missing a document (A W-2, for example) it’s important to contact your company’s HR department.
One of the benefits of filing your taxes online is that there are major services that walk you through the entire process step by step in easy to understand language. You’ll be able to identify any issues, and resolve them quickly. We recommend filing your taxes as quickly as possible to avoid scrambling at the last minute.
Keep in mind that filing your taxes after a big life event (getting married, having a child, entering a new income tax bracket) may require different forms than you’re used to submitting.
One more thing: Although you’re filing your taxes in 2021, it pertains to the income you earned in 2020. If some of your forms say 2020 on them, they’re the ones you’re going to need.
Which Services Should You Use?
The two best-known online tax filing services are TurboTax and H&R Block, and they’re the ones that we recommend you use. Both allow you to file your taxes online for free if you meet certain conditions, but have paid options if your situation is a little more complicated, or you want help. The IRS also offers a tax filing service, which you may not know about. Here’s the breakdown of how all three services work.
Using TurboTax To File Your Taxes
TurboTax has a very straightforward questionnaire, which asks you about your sources of income and basic information (marital status, children, student loan debt, etc.) to determine whether or not you can file for free.
If you’re doing taxes for yourself, and only have one source of income, chances are high you can file for free. If you have multiple sources of income, like stocks or rental properties, or are self-employed, you’ll probably have to pay for TurboTax’s paid services, which cost up to $90. These paid services allow you to file your taxes, but don’t provide additional support, which shouldn’t be a problem if you’ve gone through this process before.
If you don’t feel comfortable going through this process alone, you can pay $170 for “full service,” which connects you to a licensed “tax expert” to help you fill out the necessary paperwork.
All of these options are available if you’d like to do your work in a web browser, but you can also download a version of TurboTax on Amazon, which runs as an app on your PC or Mac.
Using H&R Block To File Your Taxes
H&R Block’s tax filing system is similar to TurboTax’s, but breaks down its services a little differently. Right off the bat you can choose between filing your taxes alone, or working with a “tax pro.”
If you file on your own, you have four tiers: Free Online (for students, W-2 employees, or people on unemployment), deluxe (maximized deductions and credits), premium (lets you file if you have income from rentals or investments), and self-employed (for freelance or small business owners). These plans can cost up to $84.99, plus an additional $36.99 per state.
Paid plans also come with perks like digitizing your current tax documents and storing them for six years, access to live or chat text support, and organizing your self-employment (freelance, gig work) income. The free plan does not include those features.
If you choose to work with a “tax pro,” H&R Block offers three options. You can meet one-on-one in an office, drop your files off at an office and have the pro take over, or meet virtually over chat, phone, or video. These services start at $69, and a great choice for beginners.
Think of it this way: If you work with a professional this year, and get a step-by-step understanding of how to file your taxes, you may be a lot more comfortable doing them on your own next year.
All of these options are available if you’d like to do your work in a web browser, but you can also download a version of H&R Block on Amazon, which runs as an app on your PC or Mac.
Using The IRS To File Your Taxes
The IRS itself has partnered with private companies to allow you to file your taxes for free if you earn less than $72,000 per year. This program is called IRS Free File. The website looks a little basic, but it’s well laid out and explains exactly which information you’ll need to provide.
The service includes pictures of all the forms you need to look for, and will guide you through the entire process, including handling all of the math calculations for you. This is an especially good resource for beginners. The IRS also offers access to free customer service and may not charge state filing fees if you use Free File.
If you make over $72,000 per year, you can use the IRS’ Free File Fillable forms. You won’t get the same guided experience, and can’t use it to file your state taxes. If you’ve been filing your own taxes for years, and haven’t had a major life event happen, this can be a good option.
When You Should Expect Your Tax Return
The IRS says that if you file now, you may receive your tax return (if you’re eligible for one) by the first week of March. If you file later, especially close to the April 15 deadline, you may have to wait longer.
Once you file your taxes, you can check the status of your refund by using the IRS2Go app on your smartphone or tablet, or using this page on the IRS website. Be mindful that in some cases you may owe the government money, or break even.