It’s a been a busy week, so in lieu of a regular post, I will point the reader to some resources one can use to file taxes. Enjoy?
How to file your taxes for free
Believe it or not, you can file your taxes for free. I’ve used two free tax software (softwares?) before: TaxAct and TurboTax Freedom edition. I really like TurboTax in general. To access free tax software, you typically have to fall below a certain Adjusted Gross Income (AGI) level. Luckily, they use AGI instead of gross income, which is good because AGI is something you can partially control!
- To access TurboTax’s free software, go to taxfreedom.com. They make it pretty hard to find if you don’t have that link, and you may have to create a new account if you’ve used the paid version before. This is what I had to do. The downside of this program is the AGI cutoff of 34k applies to both singles AND couples filing jointly, which is kind of silly.
- For other free software, even for higher income individuals, check out this page on the IRS site. In general if your AGI is above 66k you will have to do most of the work yourself, but there are some sites that will help a little.
- Of course, you can always file your taxes the old fashioned way! Just print out form 1040, follow all the instructions, and mail it in (or e-file). This is always free, and though it may be less convenient than the options above, you can certainly figure it out :). I’ve done this once before, but I like TurboTax.
How to file your taxes for cheap
Did I mention I like TurboTax? Their premier version, which can handle pretty much everything (they also have a self-employed version for $120), is only $80, which is really not that much considering what you’re getting, even for a cheap person like me. This would be useful for someone who doesn’t qualify for free software and had sold investments and/or is itemizing deductions (i.e. not taking the standard deduction). Otherwise, you can still use the basic version of TurboTax for free. Plus a lot of places offer discounts for TurboTax, like your credit card or Robinhood or really just Google it and I’m sure you’ll find something.
How not to file your taxes
Pay someone to do it. That’s how not to do it. So what I mean is DO NOT PAY SOMEONE TO DO IT. TurboTax and other fancy online software will walk you through every single step. Yes, it may take some time and force you to organize your life a little, but you can definitely do it.
If your financial situation really is too complex for even the most deluxe version of TurboTax, I strongly recommend simplifying it dramatically. I can pretty much guarantee you’re not getting any extra performance as a result of this complexity. Morgan Housel, a financial guy who charges something like $20,000 for a speaking engagement, literally owns a house, checking account, VTI, and Berkshire Hathaway stock. That’s it. If you are reading this blog, you have less money than Morgan Housel (for some reason, people feel the need to complicate their finances when they have more money). And you’re probably performing worse. So simply for life! Mr. Housel can probably file his taxes in less than 20 min, and so should you!
Ok, rant over. Filing taxes is easy and ummm….not that terrible. You can likely do it for free or cheap. Use a computer and not a human. Keep your financial life simple. See you next week.