How should I file my taxes?

[coolred]

This will only be my second year filing taxes. Last year I went to H&R block and almost crapped when he charged me 80 bucks for the whole 5 minutes it took, so I would like to avoid that route. My sister told me that mine should be easy enough that i could do it myself, and I'm sure that it prolly is, so I am considering filing online to speed up the proccess. I went to the IRS website to learn more about filing online. I found there are 3 differant ways. I could go out and buy the software and do it that way, I could download the software or I could use one of the online filing sites. I believe I qualify forthe free sites, so would that be the best way to go, or should I go out and get one of the free tax software suites that are on sale now? I am just wondering if using the free sites will allow me to take advantage of all the tax credits and stuff I get, so here is some info about me, hopefully you can help me figure out what way to go.

First I am 20 years old and live on my own(that would make me single fileing as head of household, right?) I live with my girlfriend, but she files seperately. I have a 5 month old son which i will be claiming. I only worked part of the year during 2001so my State wages and tips from my W2 is only 4544.79. It is my understanding that having that low of income and a qualifying child, I qualify for the Earned Icome tax Credit, is this correct? And if so which one of those online sites will allow me to take advantage of this. The reason I ask this is some of the sites only offer the 1040EZ and I was just not sure if the EZ was as complete as the regular 1040. What I mean is can you file for the EITC using the 1040EZ? I also think I qualify for the lifetime learning something or other. So what do you think i should use?

 

[bunker]

Go pay $20 for TaxCut or TurboTax. It's very good software that will walk you through the whole thing.

Last year I went to H&R block and almost crapped when he charged me 80 bucks for the whole 5 minutes it took

My accountant charges me $375. That $80 you paid is deductible on this year's return.

 

[SaltBoy]

<< Go pay $20 for TaxCut or TurboTax. It's very good software that will walk you through the whole thing. >>



AMEN to that! This year was the first year I used TurboTax. Saved me a mountain of headaches -- get it right now!

 

[coolred]

See thats what i ams asking though, shoudl I go out and pay the 20.00 bucks for it or should I just go to turbo tax website were I think I qualify to use thier software online for free

 

[EagleKeeper]

Based on your income, you should get the filing done free via TurboTax web site. Their system will also walk you through everything you need and do your state for you as well.

The 1040EZ form is if you are single.

Head of household is only if you have dependents (pets do not count)and are not married.
Your post info indicates that you meet this qualification.

Earned income credit should fit your situation.

Any college educated student should be able to file a 1040EZ or 1040A without paying some one else to do it.

 

[Viper GTS]

This is my third year of filing online, & I must say it rocks. 1040EZ is dirt cheap, & you get your refund in under two weeks. I filed mine last week, I should have my refund by the 8th.

Cost me under $15 to file both state & federal.

Viper GTS

 

[coolred]

Thanks, thats what I figured, I am just wondering if I should go out and buy one of the tax software packages that are free or cheap after MIR or something, or if I should just do it online for free. I mean is it worth actually having the software package? I know eventually I won't qualify to do it for free online, so should I purchase some software?

Also I was just wondering something my son is only 5 months old,therefor he did not live in the US for all of 2001. That is one of the requirements for the EITC. I was wondering if that applied to new born babies, and if it does then can I still get the EITC since even without the kid I still qualify since I made so little this year?

 

[EagleKeeper]

Viper

Remember that the EZ only works if you keep the blond one at arms length.

 

[reitz]

<< is my understanding that having that low of income and a qualifying child, I qualify for the Earned Icome tax Credit, is this correct? >>

I'm not positive, but I believe you'll qualify for the Earned Income Credit. AFAIK, you'll need to use the 1040A if you're going to take it, so that would eliminate any sites that only offer the 1040EZ.

In any case, either of those two forms are relatively simple to fill out, if you take a little time and read the instructions. I paid someone to do my taxes two years ago (I think it was H&R Block, but I can't remember for sure), and I'll never do it again. I *needed* the advance they offered right away, instead of waiting for the government to send me a check. Unless you're in a similar situation, it's definitely worth it to file yourself. It's easier (and takes about the same amount of time) than installing Windows on your computer...would you pay someone $80 to do that?

 

[coolred]

Also how exactly do I deduct the 80.00 dollars fromt his years taxes? Is it really worth it? Do I need the reciept to prove I did that, since I have no clue were it is, but ti's around somewhere?

 

[iamwiz82]

EITC:

Rule 1. You Must Have a Valid Social Security Number (SSN)
Rule 2. Your Filing Status Cannot Be "Married Filing Separately"
Rule 3. You Must Be a U.S. Citizen or Resident Alien All Year
Rule 4. You Cannot File Form 2555 or Form 2555-EZ
Rule 5. Your Investment Income Must Be $2,450 or Less
Rule 6. You Must Have Earned Income
Rule 7. Your Child Must Meet the Relationship, Age, and Residency Tests
Rule 8. Your Qualifying Child Cannot Be the Qualifying Child of Another Person With a Higher Modified AGI
Rule 9. You Cannot Be a Qualifying Child of Another Person
Rule 14. Your Total Earned Income Must Be Less Than: ($32,121 if you have more than one qualifying child, $28,281 if you have one qualifying child, or $10,710 if you do not have a qualifying child.)
Rule 15. Your Modified AGI Must Be Less Than: ($32,121 if you have more than one qualifying child, $28,281 if you have one qualifying child, or $10,710 if you do not have a qualifying child. )

link

My father was a CPA years ago and taught me how to do my own taxes, and we figured i'll be getting back $5 from the fed. govt... I need to go change my W4's today, no more of this!

On another note, does anyone know if there is a tax break for full time students who are dependant?

 

[bunker]

<< Also how exactly do I deduct the 80.00 dollars fromt his years taxes? Is it really worth it? Do I need the reciept to prove I did that, since I have no clue were it is, but ti's around somewhere? >>


Unless you itemize, which it doesn't look like you will be doing, you won't be able to deduct it. Sorry if I mislead you in my previous post.

Any college educated student should be able to file a 1040EZ or 1040A without paying some one else to do it.

While this is true, unless that college educated person got an Accounting degree, it's going to be more difficult for them to dig out the little known deductions.

I will say that any high schooler who did decent enough in math should be able to do the EZ form though.

 

[coolred]

Thanks for the link, but I already knew about it. My question now is how do i work it, since my child is only 5 months old therefor he does not meet the "lived in US for at least half of 2001" requirment, can I still claim him as a dependent, but not use him for the EITC, since without him i sitll qulify since I made under 10,000

Also my other question, is it worth it to buy the software or should I do it online for free.

 

[ATLien247]

<< My father was a CPA years ago and taught me how to do my own taxes, and we figured i'll be getting back $5 from the fed. govt... I need to go change my W4's today, no more of this! >>



No more of this? Do you mean you would rather the government take out more taxes than they should, collect interest on it for the whole year, then give it back to you like they're doing you a favor?

 

[Pepsei]

dude, you're lucky...

with two houses, stocks, charites, car taxes (only in VA not the cars in NV)...
i'm forced to use the 1040 itemized thingy...

so i guess i'll have to use turbotax....(good program)

 

[EagleKeeper]

CoolRed

The child qualifies if born in 2001. The information that you are concerned about is for people having dependents (children, relatives) that are immigrants.

Do it on-line - Your situation is such that you should not need to by anything.
If the online system fails for free, it will give you the options of paying for it.

 

[coolred]

Thanks eagle, I kinda figured thats the way that rule worked. I guess i will go the online route, just wondered if it was a good idea to actually own the software, but I guess I don't really need it. By the way i have one more question. As I have said I am unmarried, but living with my girlfriend who is the mother of my child. She also made very little this year, less then me if you can belive it. Would there be any way for me to find out which one of us would be better served claiming our son as a dependent or would it not make a differance who claims him?

 

[coolred]

Also was reitz right, do I need to use the 1040A form? The tubotax site only offers 1040, 1040EZ and 1040 premium

 

[iamwiz82]

<<

<< My father was a CPA years ago and taught me how to do my own taxes, and we figured i'll be getting back $5 from the fed. govt... I need to go change my W4's today, no more of this! >>



No more of this? Do you mean you would rather the government take out more taxes than they should, collect interest on it for the whole year, then give it back to you like they're doing you a favor? >>




actually, yes. Its all a mind game that i am playing on myself. It curbs spending and such. Just like the person who sets all of their clocks fast, so when they think they are late, they are actually early.

 

[rahvin]

If you want to test your scenario's go to the library or the PO and pick up a couple 1040EZ's and 1040's and books and run through them. Doing your taxes is EASY, don't let it phase you. Anyone that is capable of doing simple math (with a calculator) and following very simple instructions can do their taxes.

 

[coolred]

Thanks, I just found out since I have a dependant apparentlly I have to use the 1040

 

[flot]

I used turbotax online for the last 2 years, and it was an absolutely fantastic program. It prompts you along the whole way for things that might save you money, and I think even with electronic filing the fees were less than $25 - which was tax deductable, and it automatically included that into the tax form.

Excellent service, would recommend it to anyone. Go to http://www.turbotax.com and take a look.

 

[EagleKeeper]

dependent precludes you from 1040EZ

1040A is what you can use.

1040 is when you have deductions that exceed your standard level due to work expenses, business, charity and taxes/interest.

 

[coolred]

I just installed Turbo Tax, my girlfriends mom just bought it, that was the same software I was planning to use online, but I am having troiuble with the EIC or EITC. My problem is that it pops back an error when I say my son who I am using as my qualifying child only lived with me for less then 6 months. But that is due to the fact that he was just born in august, does he qualify for this credi t or not?

 

[EagleKeeper]

Not sure on the EIC credit.

I have some 1040 instructions and will check it out this evening.
Am on Pacific time.