It’s a new year. Time to get in shape, eat healthy, start a new side hustle, and…..prepare your taxes. Really? Really.
While the deadline to file 2018 taxes isn’t until April 15, now is a great time to get organized. This way, you won’t be the one stressed out and scrambling to get your taxes filed online by 11:59 pm on April 15.
Are you ready to organize your taxes and get your finances in shape? Take a look at our handy-dandy guide to filing taxes online and start the new year with a sense of accomplishment.
Figure out what income forms you’ll need
Most people will be dealing with either W-2 forms, W-9 forms or both. And, yes, the Ws can be confusing. Here’s a bit more information about these forms so you can determine which ones pertain to you.
- If you are employed, you will get a W-2 form sometime in January. This form states the amount of money you earned in 2018, as well as how much you paid in federal and state taxes and other payroll deductions, including the amount you contributed to an employer-sponsored retirement plan. This is the main income form you’ll need when filing your tax return.
- If you have a side hustle or started a business in 2018, you’ve likely provided your clients with W-9 forms. If you earn more than $600 with a particular client (who should have your W-9 on file), that client would then fill out a 1099-MISC form indicating how much you were paid for the year. A copy of this form will be sent to both you and the IRS. You will then report this income when you file your taxes online.
Figure out if what forms you’ll need to fill out
If you have a 9 to 5 job and will be receiving a W-2 this month, you may be able to take the standard deduction. For 2018, the standard deduction for individuals is $12,000 and $24,000 for married people filing jointly. If you use this standard deduction, you can’t also itemize deductions. Instead, you’ll take the standard deduction and fill out the new Form 1040 (prior to tax year 2018, there were two other options for shorter forms: Form 1040EZ and Form 1040A).
Form 1040 with schedules
If you’ve had a life change (got married, got divorced, had a child, started a business etc.), this may bump you into a different financial situation where you’ll need to take itemized deductions versus the standard deduction. If this is the case, you may need to fill out the new Form 1040, in addition to one or more of the new schedules. For example, if you have capital gains, unemployment compensation, gambling winnings, or any deductions to claim (including student loan interest deduction, self-employment tax, or educator expenses), you may want to fill out Schedule 1. To learn more about the new Form 1040 and the six schedules, check out this Q&A from the IRS.
If you will be filing schedules for 2018, then it’s important for you to prepare and organize your itemized deductions in advance. This will help you when it comes time to file your taxes online. If you’re a freelancer, you’ll definitely want to organize your deductible expenses. This can save you big bucks by lowering the amount you owe or perhaps even netting you a tax refund. Here are some of the more common itemized deductions:
- Home mortgage interest
- Charitable contributions
- Medical expenses
- Self-employment expenses
- Home office and other associated deductions
- Educator expenses
Figure out how you’ll file online
According to the IRS, nearly 90 percent of taxpayers now use tax software and the agency expects that the new Form 1040 and schedules will make online filing even easier. You can prepare and e-file for free using IRS Free File.
Alternatively, you can spend some money and use one of the more popular DIY tax software tools, like Intuit’s TurboTax.
If you want professional help, you can go with an authorized e-file provider in your area. To find a local tax preparer, you can do a search here with your zip code or state.
File early. Get your refund early.
If you think you may be getting a tax refund for 2018, this is more of an incentive to prepare your taxes and e-file early. The sooner you file, the sooner you’ll get your refund and you know what this means – more money in the bank. And, if you want your cash as fast as possible, make sure you use direct deposit. In fact, eight out of 10 taxpayers get their refund via direct deposit through the IRS.
Pro tip: Chime makes it simple for you to get your money early. Here’s how to get your tax refund faster with direct deposit:
- Open a Chime bank account
- Select “direct deposit” on your tax return software and include your Chime Spending Account and routing numbers. Make sure all information is accurate.
- Sit back, relax and wait for your refund to appear in your bank account. According to the IRS, nine out of 10 direct deposit refunds are issued within 21 days (it typically takes eight weeks via snail mail). Better yet, you’ll get a text alert and email from Chime the second your refund hits your account.
We know that taxes are no fun. But, before the very thought of organizing your taxes causes you to break out in a sweat, take a look at the guide and resources here. (Pro tip: if you need more expert help, it’s advisable to seek out an accountant or tax professional).
Before you know it, you’ll be ready to file your taxes and set your sights on other financial goals this year.