Consumer Boomer

Posted: 02 Feb 2011 06:37 AM PST

It’s Tax Time. That time of the year when you begin receiving interest statements, tax forms, and W-2s in your mail box. It is time to start thinking about doing your taxes.

photo credit: zenobia_joy
Before you can actually sit down at your desk or computer and fill out your 2010 federal income tax return, there is specific information you need to gather. Hopefully, you have been keeping track of medical expenses, out of pocket business expenses, and other possible deductibles all year long. This will make your calculations much easier. Get together your receipts, financial records, and other related paperwork and let’s get started!

IRS Tax Forms

Once you have all necessary materials, you need to determine which tax form is right for you. Always try to pick the simplest form. This will save you time in preparation and the Internal Revenue Service time in processing. Ideally, you will be able to use the 1040 A or perhaps even the 1040EZ. However, depending on your circumstances, filing the 1040 form might be necessary. See below for short descriptions of each form:

Form 1040 – This is the "long form" generally for those with more complex tax situations and who typically itemize their deductions (although the standard deduction can be claimed).
Form 1040A – This is a short form of the 1040 intended for those taxpayers with an annual income of less than $100,000 who also plan to take the standard deduction.
Form 1040EZ – This is the simplest form for individuals who have no dependents, earn less than $100,000 per year, and plan to take the standard deduction.

Be sure to read more detailed descriptions of each tax form before making your final decision as to which to use.

Fortunately, in the twenty-first century there are several different ways to file your taxes and almost as many manners in which to pay.

Tax payers can fill out printed income tax forms and physically mail to the appropriate addresses. Helpful worksheets are included with the packet from the Internal Revenue Service.

Filing Taxes Online is Easy

Filling out your tax return online is becoming a popular choice these days. Last year more than half of taxpayers in the United States chose to submit their federal tax returns electronically. There are many benefits to using your computer to do your taxes including fewer errors and faster processing. The Internal Revenue Service offers ways to file for free to qualified users. You can also purchase inexpensive tax filing software at almost any department store.

Of course you can always hire an accountant to do your taxes for you. Some people will always choose this option, content to hand everything over to a professional, even if it means they have to pay more.

As far as payment options, the sky’s the limit. Well, almost. You can paper file or e-file early and pay with a credit or debit card later. You can also postdate a check. Payment can be made over the phone, via internet, when e-filing, or through the mail. Many taxpayers choose to utilize their credit cards in order to earn frequent flier miles and the like through their credit card companies.

The most important thing is to start! And, remember, this year we all get a few extra days to file. Federal taxes aren’t due until April 18^th, 2011.