Taxes Don’t Have to be Intimidating — In Fact, You Can File Them Yourself!

Taxes Don’t Have to be Intimidating — In Fact, You Can File Them Yourself!

Rachel Morey |Apr 14, 2021

How To Do Your Own Taxes

If you work for an employer, are self-employed, or receive taxable money from any source, you may be legally required to file your taxes with the IRS each year. More than 152 million Americans filed taxes in 2020. 102 million of those filers received a tax refund because they overpaid their federal taxes. The average refund was $2,741.

If you don't file your taxes, you may be in violation of federal laws. You also won't get a refund unless you file, even if you overpaid. Do you want to know how to do your own taxes? Then keep reading.

How to Start Filing Your Own Taxes

No matter which method you choose to file your own taxes, you'll need to gather some paperwork. Make sure you have copies of the following:

  • Last years tax returns
  • Income documents that may arrive in the mail or electronically, including: W-2 forms from employers, form 1099-NEC from freelance or contract clients, forms 1099-DIV or 1099-INT from banks or institutions that paid you interest or dividends, and/or form 1098-T from education-related entities.
  • Receipts for charitable donations
  • Receipts for non-reimbursable work-related expenses
  • Medical bills
  • Social Security numbers and birth dates for joint-filers and anyone you'll claim as a dependent

It's smart to keep all of your tax-related documents in one place. You'll receive income-related documentation in January and February each year.

You have several options when it comes to filing your taxes.

IRS Free File

If you want to file your taxes using IRS Free File, you'll need last year's adjusted gross income (AGI) from your previous tax return to verify your identity. Many tax preparation software companies offer IRS Free File.

The IRS's Free File tool is open to taxpayers with a 2020 adjusted gross income of $72,000 or less. You can find out if you are eligible to use the IRS Free File service with their offer lookup tool.

Tax Preparation Software

Tax software allows you to do your own taxes by simply answering a series of questions. The tax interview feature included with many tax preparation software packages makes getting your maximum refund a sure thing.

A good tax software program starts at $20 but could cost much more depending on your circumstances.

Tax Preparer

If you had a major life event, own a business, want to itemize your deductions, or need to report securities transactions, you may want to invest in professional tax preparation. In 2019, the average cost of professional tax preparation was $203. If you have complicated taxes or are intimidated by the idea of doing your own taxes, you may be better off seeking help from a professional.

How to Get Extra Time to File Your Taxes

If you can't meet the IRS deadline for filing your taxes, you can ask for a tax deadline extension. It takes about five minutes to fill out the simple request form. Even if your income exceeds the maximum allowed for the Free File system, you can electronically request an extension.

The IRS automatically extends the tax deadline to October 31 each year for taxpayers that request extra time to do their taxes. You'll have to estimate how much you'll owe the IRS and pay that amount, but you'll have extra time to properly prepare your tax filing paperwork.

How to File Past-due Tax Returns

If you were required to file taxes with the IRS in the past but didn't meet the deadline, go ahead and complete past-due tax returns, now. Filing past-due tax returns mean you'll avoid further interest and penalties if you owe taxes.

Your refund may be lost if you don't file tax returns in a timely manner. You can still get money owed to you by the IRS if you file a late return within three years of the original deadline. This includes tax credits like the Earned Income Credit.

If you need help filing your past-due tax return, call 1-(800)-829-1040. You can get wage and income information to help you file your past-due returns by filling out Form 4506-T, Request for Transcript of Tax Return.

Do It Yourself, or Hire a Tax Preparer?

Of the 152 million taxpayers that filed a tax return with the IRS in 2020, more than 69 million decided to do their own taxes. Whether you choose to do your own taxes or hire a professional to help you with the paperwork is up to you. Taxpayers aren't legally required to hire (and pay) someone to do their taxes.

Qualifying taxpayers can get free help with tax filing. The Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs offer free services for basic tax returns. To qualify, you must make less than $57,000 per year, have a disability, or have a limited ability to speak English. People over the age of 60 can get help with questions about retirement or pension-related tax issues.

If you prefer to do your own taxes, it's wise to invest in tax software. Tax codes are updated every year, so you'll need the most recent version of the software you choose to help you file correctly.

Compare costs when deciding whether to do your own taxes. For some people, the process is intimidating, so they prefer to hand over their records to a professional. Other people don't mind going through the steps with help from tax software. In years past, doing your own taxes meant piles of paperwork and time-consuming calculations. Now, it's easy to get tax software to do the heavy lifting. You just have to plug in the numbers.

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5 of the Best Auto Insurance Companies

Eric Bank | April 14, 2021

Protect Against Collisions and More If you drive a car in the United States, liability insurance must cover it. This type of policy pays for medical and property damage resulting from a vehicular accident. You can also purchase comprehensive and collision insurance to cover other costs. These additional coverages help protect the value of your car should it be damaged. If you are calculating how much it will cost to buy a car, you need to take into consideration the cost of insurance as well. In this article, we’ll review the basics of car insurance and the best auto insurance companies in America, including costs, pros and cons. This is a brief introduction to automobile coverage. Liability Coverage When an accident occurs, liability insurance covers you, household members and authorized drivers for the costs associated with property damage and bodily injury. It covers the cost to repair or replace property damage that you caused. [youmaylike] You are also covered if you cause the bodily harm or death to someone else while you are driving the car. This includes medical expenses, loss of income and specified legal defense costs. Collision Insurance If you are involved in a collision, this type of insurance will help pay for repairing or replacing your vehicle. If the collision is your fault, the coverage may extend to other damaged vehicles involved in the accident. States do not mandate that you buy collision insurance, but your lender or car dealer will if you finance or lease the car. Policies offer a range of deductibles, which is how much you’ll have to pay for repairs before the insurance kicks in. Larger deductibles lower the policy premiums but expose you to more out-of-pocket expenses if a collision occurs. Comprehensive Insurance Comprehensive insurance covers damage to your car that occurs for reasons other than a collision, including theft, fire, vandalism, weather and natural disasters. This coverage is often required if you finance your automobile. You can add riders to this insurance to provide coverage of additional costs, including auto towing, glass repair, daily rental while your car is in the shop and emergency roadside service. As with collision insurance, you can set the deductible on your comprehensive insurance policy to cut your premium costs. Gap Insurance If your car is severely damaged in an accident or other incident, you might find that your comprehensive and collision damage won’t provide enough coverage to pay off the amount you owe on the vehicle. Many policies pay only the fair market value of a totaled car, which might be only 80% of the amount you owe. You can buy additional insurance to plug this gap and ensure you can pay off the car loan in full if the vehicle is destroyed or stolen. Normally, car leases require you to buy gap insurance. If you pay cash or pay off your loan, you can save money by avoiding or dropping gap insurance when no longer needed. Top Five Auto Insurers These five insurers all offer full coverage policies and many additional services. Amica Amica is a superstar among car insurers, winning accolades from Consumer Reports and J.D. Powers. It’s known for handling the claims process smoothly. The average annual cost for full coverage: is $1,360. Pros You can have your car repaired at any body shop, without restrictions. Offers a premium package which, for an additional cost, provides full glass coverage, rental coverage, good driving rewards and identity fraud monitoring. Superior financial stability rating from A.M. Best. Cons Missing some discounts, such as military, low-mileage and prepay discounts. Must speak on the phone to get a quote. Sparse website when it comes to customer education. State Farm State Farm is the country’s largest multi-line insurance company. It excels in customer service and regularly garners high marks from customers. The average annual cost for full coverage: is $1,337. Pros Superior financial stability rating from A.M. Best. Excellent online quote tool, getting customers a quote in as little as five minutes. Easy claim handling and top service from its more than 18,000 agents and its easy-to-use mobile app. Cons Doesn’t offer coverage for new car replacements or uninsured motorists. Missing prepayment and automatic payment discounts. The Hartford While only 11th in size, The Hartford is big when it comes to policy options. It offers rates based on your actual driving as well as full replacement of new cars when destroyed shortly after purchase. Average annual cost for full coverage: N/A. Pros Solid benefits, including superior roadside assistance and towing programs. High marks from customers for their purchase experiences. One of the few insurers with mechanical breakdown coverage for out-of-warranty repairs. Cons Mediocre service interaction according to J.D. Power surveys. Sparse online learning materials. Geico Geico is the second-largest U.S. car insurer. It is a favorite among tech-savvy geeks who appreciate the insurer’s mobile app and excellent online service. The average annual cost for full coverage: is $1,627. Pros Geico offers plenty of ways to save, such as multi-vehicle, driving history and vehicle safety equipment discounts. Special savings for active and retired military members and federal employees. Full-featured mobile app for getting quotes, buying insurance, managing your policy, submitting claims, summoning roadside assistance and making payments. Cons Human help may be in short supply, as just about everything is handled online. No gap insurance is offered. USAA No insurer matches USAA for service to military members. Unfortunately, it's only available to active service members, their families and retired veterans. Average annual cost for full coverage: $896. Pros Superior financial stability rating from A.M. Best. Top-ranked purchase experience score from J.D. Power. Cons Missing gap coverage. Doesn’t offer interior vehicle coverage or new car replacement coverage. Limited availability. The Right One for You Competition in the insurance industry helps drive down prices and prompts insurers to offer money-saving features. For example, your carrier might reward you for a safe driving record and for having a long-term relationship with the insurer. The right insurer for you is highly rated for service, offers the exact coverage you want and does so at an unbeatable price. You should always gather multiple quotes before selecting an insurer, and make sure you get credit for all applicable discounts.

How to Apply for a Business Credit Card

Myles Leva | April 14, 2021

Paying for Business Expenses Applying for a business credit card is something a small business should seriously consider for itself. Business credit cards can provide a range of benefits to a business. They allow a company to build up credit for better borrowing conditions down the road. They’re also quite easy to apply for. In this article, we’ll go over how to apply for a business credit card and other important points to note. What Is a Business Credit Card? A business credit card is a credit card that is intended for business expenses. These cards are not meant for any individual’s personal use, but they are available to businesses of all sizes. What Is a Business Credit Card Used For? Business credit cards are meant for business expenses, and as such, they come with several perks that you wouldn’t get with a normal credit card. Business credit cards typically have far higher credit limits than normal cards, but they are also harder to qualify for. [youmaylike] As a business phenomenon, business credit cards vary their offers greatly, and certain cards are meant for certain businesses. They are also highly customizable when it comes to individual payment terms. Businesses don't always have consistent incomes like individuals do, and business credit cards handle this problem. These cards are used to gain access to a long line of credit, to control employee spending on business expenses and more. One of their other common uses is to make accounting easier, as putting all business expenses on one separate account makes reporting to the Internal Revenue Service easier. In the end, there are many uses for a business credit card. Why Would I Need a Business Credit Card? You might not need one, but if you run a business, you’ll be leaving money on the table by not at least looking into them. Business credit cards can solve many of the problems business owners face. If you need employees to make purchases for the business, a business credit card is the safest option. These cards can be given to authorized users, a status you can easily give to any of your employees. From here, these cards make it easy to monitor employee spending and spot any discrepancies. You can attach customized user privileges to each card to limit spending and place limits on where the card can be used. As mentioned, if you feel like your credit is too limited, business credit cards are a sure way around low credit. According to the American Bankers Association, the average monthly payment on a business credit card is twice as high as the average payment on a normal one. If you’ve found yourself annoyed with the Internal Revenue Service over the complicated reporting processes for business owners, you’re not alone. This is where a business credit card can solve another problem. Simply handing over your business credit card statements to your accountant will make them love you. It will also provide them with the information they need to predict future spending. Another great use for a business credit card is lifting your liability for debts. Liability for credit card debt is determined by the liability offered by the card. If you’re using a personal credit card for business expenses, you are liable for all debts. On the other hand, if you use a business credit card with commercial liability, your business is liable for any debts, which changes the game. Keep in mind that some cards offer joint liability, which leaves both you and your business liable for any debts. Make sure you know what you’re getting into before signing any paperwork. Lastly, just as personal credit cards offer rewards programs, so do business cards. The main difference here is that business credit card rewards are tailored to your business needs. How to Apply for a Business Credit Card Before you apply for a business credit card, you should make sure you’re eligible. For the most part, you only require the following to be able to apply for one: A legal name for your business. A business structure to apply with, such as a Limited Liability Corporation. An explanation of the nature of your business. You’ll typically be given a list of industry types to choose from. A tax ID number issued by the Internal Revenue Service Your roll in the business you’re representing Various business/financial information including: Annual revenue. Number of employees. Length of time in business. Estimated monthly expenses. If you have this information ready, you can apply for a business credit card. At this point, it would be wise to shop around and find the best option for your business. Your decision on the business credit card you choose will have larger ramifications than your choice of a personal credit card. Applying for a business credit card is much the same as applying for a personal one. There are a few differences, but the main thing to remember is that business credit cards are taken more seriously than normal ones, so you’ll have to face a higher bar of entry. This doesn’t mean getting a business credit card is hard, but it does mean you need to arrive more well-prepared than you normally would. To make things easier, you can prepare for certain obstacles in advance. You may need to sign a personal guarantee that you will pay off any debts. Also keep in mind that if you’re the one applying for a business credit card, and your business doesn’t already have one, they will conduct a personal credit check. It may be best to try to optimize your personal credit if you plan on applying for a business credit card in the future. Some Options at a Glance Here are some of the most popular options for small business credit cards: Chase Inc Business Preferred This is a great option for a few reasons. With the Business Preferred card from Chase Inc, you get 80,000 ultimate reward points when you spend $5,000 with the card in the first three months. The card also provides generic, but highly useful benefits for business owners. Business Platinum Card from American Express The Business Platinum is ideal for businesses that spend a lot on flights and travel. This card offers numerous rewards on flight and hotel expenses and makes sure you get something serious back if you use it for these expenses. Chase Inc Business Unlimited The Chase Inc Business Unlimited offers unlimited 1.5% cash back. While we’ve said enough already, they also offer several other perks that are overshadowed by their first one.