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March Reddit Challenge - File Your Tax Return Early!



This month's Reddit challenge - file your tax return early - can ensure that you don't miss any important details on your return. Plus, it'll get extra cash in your pocket you can put towards debt.

With tax season fast approaching, it's no wondering Reddit's March challenge is: "Prepare your tax return accurately and file early."

Luckily, I already did this, because I'm too impatient to wait for the small chunk of money my tax return offers.

But, for everyone else who doesn't do their taxes until the day they're due (hey, I went to college, I get procrastinating), this challenge is perfect for you.

Today, I'll go step-by-step through the challenge, but if you're looking for a more in-depth guide to filing your income taxes, look here!

Laying the groundwork
Reddit gives you a well written plan to help you get started with your taxes. They want to not only help you file your taxes, but really learn how it works. After all, it'll get a lot easier in the years to come if you even sort of understand how taxes work.

To get you started they offer a video - Basics of US income tax rate schedule - from the Khan academy, as well as instructions on how to determine your filing status, to help you understand where you fall in the tax world.

If you have to itemize your deductions, they offer a helpful video to explain what the heck that means - we also offer an instructional guide.

Get your paperwork together
Now it's time to actually fill out all your forms. There's a variety of documents you'll need to have on hand, but luckily your employer will send you everything you need (if you're a freelancer, see below).

Here's a comprehensive list of all the documents you need to file your taxes.

Reddit also has some great tips to help you get your documents organized.

-Jot down every possible way you made money this year (remember, even if you don't get a form, you still need to report it).
-List any interest on your bank account and any dividends from your stock (1099-Div form).
-Make a list of all the possible deductions you might think you're eligible for - make sure you have the documentation to back it up!
-List any mortgage interest you paid (1098), student loan interest you paid (1098-E), education expenses (1098-T), and all charitable contributions.

What if you're self employed?
Unfortunately, if you're entirely self-employed, or even make a little extra money on the side, your taxes suddenly get a lot more complicated.

Luckily, we've got you covered.

For starters, you'll need to pay quarterly estimated taxes, which aren't fun, but if you don't you'll have to pay a huge sum at the end of the year plus a fee.

If you're completely lost--which, lets be honest, most freelancers are the first time they file - TurboTax has an amazing Self-Employed product.

While TurboTax makes your life a lot easier, you'll still need to know what you can claim as a deduction as a freelancer. That too is a little more complicated than your average Joe's deduction.

Finally, here are a few more tips if you're a freelancer.

Use a tax software
If you can't stomach the thought of doing this all by hand or on the IRS's website, you may want to look into using a tax software. Of course, there's TurboTax, which offers a free tax return (both federal and state) to anyone who files a 1040EZ or 1040A.

But, H&R Block, Tax Act, and many others offer nearly identical packages. And, if you don't meet the requirements to file for free, many of these alternatives to TurboTax are actually much cheaper - albeit a little clunkier when it comes to format.

Or get a tax-preparer
The best time to get a tax preparer is if you're concerned you may be filling incorrectly. Or, if you're extremely confused by anything said above. It's better to dish out the cash for someone with professional knowledge than end up owing the IRS money.

For a summary, here's when you may consider a tax preparer:

-If you bought or sold stock this year,
-Had freelance income,
-Provided financial support for someone that isn't a dependent
-If you're at all unsure about your filing situation.

Finally, it's time to file!
Now that you have everything together, it's time to actually file. There are a few small things you need to make sure you don't forget.

Also, a quick note - don't forget to file your state taxes! If you file through a tax software most of the information you entered for your federal return will simply transfer to your state taxes.


Location: Birmingham, United States

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