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Tax Preparation -- Making the Best of Your Choices

There are several preparation options available to taxpayers: filing a paper return, using tax software (e-file), or going to a paid preparer. These options are available for both federal and state income tax returns. This article examines each and attempts to point out the lowest cost options.

PAPER RETURN

Preparing a paper return remains a viable choice for some. The biggest advantage -- it's free.  IRS forms are available online at:

http://www.irs.gov/formspubs/lists/0,,id=97817,00.html

IRS forms are available as Adobe Acrobat PDF files. The PDF templates are assigned document rights, meaning users can enter values in the forms, print them, and even save them for free.

TAX SOFTWARE / E-FILE

Free File

Many taxpayers qualify to use software or online services for free. The IRS has partnered with several private tax-software companies in a program referred to as Free File. In order to qualify, a taxpayer must have a gross adjusted income of $52,000 or less. That means 70% of all taxpayers are eligible.  To select a company, use the link below.

http://www.irs.gov/app/freeFile/jsp/index.jsp

A word of caution many of these companies may offer to provide additional services (i.e. State Income Tax Return) for a fee. You are not required to use or pay for any of these additional services.

Over $52,000?

For those with an income over $52,000, there is still a free option. TaxACT has a standard version complete with e-file. To get started, use the link below.

http://www.taxact.com/products/online_s_overview.asp

When choosing the Standard (free) version, TaxACT will prompt you to consider upgrading to the Deluxe version and/or adding your state return for an additional fee; however, you are not required to do either.

STATE INCOME TAX RETURNS

Many states offer free e-file options. For more information visit the site below, this in turn provides links to the Department of Revenue or similar taxing authority for all 50 states.

http://www.accountingmajors.com/accountingmajors/tax/

PREPARER

Volunteer Income Tax Assistance Program (VITA)

The VITA program offers free tax help to low & moderate income ($39,000 and below) people. To locate the nearest VITA site call 1-800-829-1040. For more details use the link below.

http://www.irs.gov/individuals/article/0,,id=107626,00.html

Tax Counseling for the Elderly (TCE)

The TCE program provides free tax help to people age 60 and older. Call 1-800-829-1040. In conjunction with the IRS, the AARP conducts the Tax-Aide program. Call 1-888-227-7669 or visit the site below.

http://www.aarp.org/money/taxaide/

Tips for Finding a Reputable Tax Preparer

The Better Business Bureau offers advice at the articles below:

http://www.bbb.org/alerts/article.asp?ID=739

http://www.bbb.org/alerts/article.asp?ID=740

THANK YOU

We hope you found this article useful and informative. Please visit our home page for future articles.

http://www.accountingmajors.com/

 

 

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