How to do taxes (last minute)
Good news: They extended the tax deadline. Bad news: It’s basically now. Specifically, the tax deadline is one week from now: Monday, May 17. Do not panic! Here is how to do your taxes. Or how to file taxes. Or whatever.
Step 1: Release your fear
Are the words “do your taxes” actually terrifying? Are you afraid of all the little boxes? Of owing money? Of adding or subtracting wrong and being put in jail by a stern man in an IRS-branded windbreaker?
First things first. The IRS does not incarcerate people for being bad at math. The federal government does not have time for that. There would be way too many people in there. Second, you can do your taxes. Years from now, when you still procrastinate on this, it will be because it’s boring, not because it’s scary.
Step 2: Find the official-looking sh*t
If you got a paycheck last year, you probably paid taxes already. Your employer sent you a W2 form that shows how much you paid in taxes in the year 2020. It may have been sent to you in the mail, or your may have access to it online. Did you find this thing? Good. Then go look through all the other papers you leave strewn on your kitchen table. If you find one that says “1099” or “1098,” you’re going to need that too.
Step 3: Get tax help
Don’t try to be a hero and go solo on this one. Tax prep software is your friend. There are a number of options out there, from TurboTax, H&R Block, Credit Karma, and TaxAct. Don’t stress too much about which one you choose. They will all give you the same results, and they have guarantees for accuracy.
If you really want to save money, compare the pricing options for each one before you start. Most of them have a free option for the simple returns that younger people have. Keep in mind that you’ll need to file federal and state taxes. If you worked in multiple states, you need to file separately in each state. The software will walk you through this.
Step 4: File
Your tax prep software will walk you through step by step, asking questions about the forms you received and other deductions you might be entitled to. Deductions are legit reasons to subtract from your tax bill, and they are great. Did you pay for health care? Drive your own car to go help out with a charity? These may be deductions you can claim, which means you’d end up owing less.
Overwhelmed? Don’t give up! When you’ve gone through the steps, you’ll be asked for your approval to send in your paperwork electronically. Tax prep software will also help you pay what you owe or use direct deposit to your bank if you get a refund.
Step 5: Reflect
Did you get a refund or owe money? Everyone loves getting refunds, but financial experts don’t usually recommend this. That’s because you’re basically giving the government an interest-free loan for a year before you get your money back. Sometimes this is unavoidable, but if you had one steady job for the whole year and got a hefty return, you might want to review your withholdings. Your employer can help you with this. The best target is to owe just a little bit in federal and state taxes when it’s all said and done.
But the important part is you got through it! You did your taxes. See, it wasn’t even that hard! Every year you will panic a little bit less before Tax Day. (Remember it’s usually April 15, so stay on your toes in 2022!)
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I remember doing my taxes on paper. I made copies of the forms beforehand so I could practice. When I had written all the right numbers in the little boxes and checked them five thousand times, I rewrote them on the final sheet and put the sheet in an envelope and put a stamp on the envelope and walked to the mailbox and put the envelope in the mailbox. Then I went to join the other dinosaurs.