Have you filed your tax return yet?

How do you file your yearly income tax return? Do you go to a CPA firm for assistance, do you visit a tax preparer such as H&R Block or do you prepare your own return using software you buy?

Depending on your situation your only option could be a professional service. If you have a side business or small business you would be wise to get help from a reputable company that knows about taxes. Also, if you had a big change in your personal life such as buying your first house, getting a baby or maybe inherited property, consulting a CPA will give a thorough advice on how to handle this best for tax purpose.

But if you do not fall in any of these categories you could qualify to file your return for free!

Two ways to file a free income tax return.

1. Do-it-yourself

The IRS offers a special on-line service that you can use if you are comfortable doing your own taxes. If you have a W-2 from your employer and no other deductions, this is an easy filing from the comfort of your own home. In order to qualify for the free programs you have to consider a few limitations:

–        Your gross income in general has to be lower as $60,000

–        Often you can only file if you are in a certain age group

–        And some programs only allow individuals to file tax returns in certain states.

You can find more details on the different software providers on the IRS website.

File your Tax Return for Free!

1. Volunteer Income Tax Assistance (VITA)

For those persons that do not understand the tax terminology, do not have access to a computer or prefer that someone with more knowledge takes care of their tax return, they can find help from specially trained Volunteer Income Tax Assistants. The IRS yearly recruits persons that learn to do income tax returns in specific locations throughout the country. The VITA program offers free help to low-income residents, persons that are disabled or over 60 years old, and that earned less than $53,000 in 2014. The AARP has a similar program that provides tax assistance to seniors.

Click on this link to find locations in your area. You also can call 211 to find a site. Often a community center, library or accounting school will open their facilities at certain times. Some locations require an appointment and others only do walk-ins. If it is really busy, you might have to wait before a volunteer preparer can assist you.

Either way, make sure you have all documentation with you, so you do not have to go back to retrieve something you forgot. You definitely need your Social Security card in order to start at a VITA site. And if you do not have health insurance through your employer you need to prove that you got health insurance on the market place (Form 1095-A). To maximize any lawful deductions and credits, you need to show the preparer that you qualify for it. Therefore, it is better to have more evidence as needed so bring all medical receipts, travel logs, insurance payments, kid’s day care invoices, etc. to get all that you qualify for.

Lastly, I want to mention that the Affordable Care Act (ACA) this year can cause a penalty, even if you paid for your health insurance through the market place. When you purchased a silver tier health plan you also had the option to obtain a subsidy and reduce your premium payment. Now at tax time, the tax preparer will compute your annual income and maybe it is different from the amount you used when purchasing insurance. If you benefited from a subsidy that was too high this may affect your tax refund or tax liability.

I hope this information helps you to prepare for filing your income tax return this year. Do you have any suggestion on filing an income tax return? Feel free to leave a comment.