Most tax payers find it difficult to pay their taxes in the expected time, except those who are familiar with the free online tax filing website provided by the IRS. The website IRS.gov gives information on how to fill out the forms and the requirements one should have. It provides a step by step procedure making the task simple and overly convenient.
The program software that can be used to file free of charge can only be used by those who are qualified. Free tax filing involves doing one’s taxes on an online form and is easier and faster than the traditional method of paper filing. The IRS provides free federal tax filing services for anyone that earns an adjusted gross income of less than $57,000. Having e-filed the correct information, a notification from the IRS is electronically mailed to you. The services that are provided include filing a tax payment, filing tax returns and finally filing a tax refund.
In readiness for filling the online forms, one should have at hand, a copy of the previous year’s tax return, determine ones adjusted gross income (AGI) and go through the free file FAQs and free file fill-able forms FAQs. After filling in the free federal tax filing forms with the right information, one should transmit it using a secure IRS e-file.
A lot of money is “lost” through taxes, and personal tax planning ensures that a person gets the most out of their finances while paying less tax. At the end of the day one will be sure of saving up quite some amount of money and hence securing their finances. There are ways that one can plan their finances in order for them to minimize the amount of taxes that they are to pay. There are a few ways in which one can achieve this and they include the
reduction of one’s income, increasing deductions and making use of tax credits.
The reduction of income
One of the most important elements that will determine the taxes on one’s income is the Adjusted Gross income. This element plays a very important role in finance. One needs to realize that the higher one gets in terms of their income, the higher the tax they are to pay. With AGI it simply means that you need to add up all your income and subtract any
adjustments. The examples of the adjustments made to your income include making contributions towards retirement plans including the 401(k) and other similar plans. The adjustments will ensure that your income is lower hence lowering
The best way to ensure that a person is increasing ones taxable deductions is by itemizing the deductions. These include the state taxes, mortgage interest and gifts to charity. Once you keep track of the itemized deductions it is important to compare the expenses to the standardized deduction. This will largely depend on the number of dependents one has. The more the dependents the higher the standard reduction one is expected to have. This is one of the strategies that used in reducing the amount of income that is subject to being taxed.
Tax credits can work to reduce one’s taxes. Some of the people illegible for tax credits include college students who get tax credit for their first two years and for those that commit to taking a lifetime tax credit. The course one takes does not really matter. One can also reduce taxes by avoiding making withdrawals from their retirement plan. This will
ensure that the tax bill is lowered on your finances.
One can also increase their withholding which will keep of any owing. Through this one is to get a larger refund as compared to what would have been taken from their paycheck during the year.
Author’s Bio: Val Anne is an in-house writer from Franklin Debt Relief, a company specializing in programs for people with high credit card debt.
If you are philanthropic by nature, and have a financially comfortable retirement, you may be wondering the best way to donate to your favorite charity. If you are at least 70-1/2 you have a special opportunity in 2008 and 2009. If you transfer your funds from an IRA directly to the charity, they will not be included in your taxable income, as they would if you took an IRA distribution and paid it over to the charity.
You may be wondering why this matters, as the charitable payment is tax-deductible. However, many deductions depend on your adjusted gross income (AGI), for instance medical expenses are only deductible to the extent that they exceed 7.5% of AGI, so if you can keep the money out of your income it will help your tax situation. If you need to make a required minimum distribution for 2008 from your IRA plan to avoid penalties, you have until April 1, 2009 to donate directly to charity, satisfy your minimum distribution, and avoid having the amount counted as income to you.
If you are looking to prepare, print, and file your tax return electronically this tax season all for free, TaxAct Online 2013 is the software you will want to use for both a complex and a simple return. And TaxAct will guarantee that your refund is the maximum refund allowed.
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Weather you are looking to file the 1040EZ, the 1040A, or the full length 1040 tax return, TaxAct Online supports all three forms and allows you to electronically file (eFile) each form for maximum speed and efficiency. With TaxAct Online you can get your return in as few as 8 days.
TaxAct Online provides one of the least expensive state return options you will find. For $13.95, TaxAct Online will prepare, print, and eFile your state return directly with your state. Your federal tax information will be imported for you making the state return simple and accurate. And when you eFile your state return, you will receive confirmation from the state as proof that you have filed your taxes.