Thursday, December 13, 2012

All I Want for Christmas is to File My Income Tax for FREE!

clip_image002[4]W. Edwards Deming said, “There must be consistency in direction.” If there is one thing about Charlotte County, it is consistency. Certain things that happen every year, year after year. We have the Florida Air Show in Punta Gorda each year. We look forward to the Punta Gorda Block Party this April just as we did in years past. We have the Red Fish Tournament, Gallery Walks, car shows, etc; each year just like clockwork. It makes us feel safe, knowing the future. Some of these events have been around for a while, some are fairly new, but their consistency has been established.

Did you know that there has been one event that has occurred every year since 1916? This one event has been attended by almost every single person without exception. In fact we have so dutifully taken part in this event that we don’t even think about it until it is upon us. Have you figured out what it is? Here’s a hint, it takes place April 15th this year. Give up? It is the filing of your Federal Income Tax forms with our friends at the IRS.

How are we going to file our taxes this year? Some of us will spend a few days collecting all our receipts, property tax records, charity contributions, W2’s, 1099’s, turn them over to our beloved CPA, and hope that our forms go to the top of the file. We pray that the CPA uses his/her magic to save us as much money as possible without our spending time in the BIG HOUSE.

Others of us will go to the local office store and buy one of the popular tax reporting software packages. We then will spend some more time answering the interrogatory that walks us through all the forms and calculates the total good or bad news. Some of us need the super deluxe packages with the forms required to report how many times we blew our nose this year. But many of us simply need a 1040, 1040a or 1040ez. For these people, the cost of the software package or the CPA is more than the tax we owe or expect back. What’s an enthusiastic tax payer to do?

Our computer might be able to help. There are a number of companies that offer either online or downloadable tax software for FREE. (Martha, how much of a deduction for free?) The best place to start when investigating this possibility is (queue the scary music) http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free. Once there, click on the links that help us determine our eligibility. Let Free File do the hard work for you with brand-name software or online Fillable Forms. You can prepare and e-file your federal return for free. The IRS claims “The Free File program is a free federal tax preparation and electronic filing program for eligible taxpayers developed through a partnership between the Internal Revenue Service (IRS) and the Free File Alliance LLC, a group of private sector tax software companies. Since Free File’s debut in 2003, more than 15.4 million returns have been prepared and e-filed through the program. Free File allows taxpayers with an Adjusted Gross Income (AGI) of $57,000 or less in 2012 to e-file their federal tax returns for free.  That means 70 percent of all taxpayers – 95 million taxpayers – can take advantage of the Free File program.”

Read the information presented on the WEB page there and then either choose a company listed or, if unsure of which company offers the preparation you need, click on the Guide Me to a Company button and let the computer point you in the right direction. In my case the site listed five companies that would prepare my taxes for free and let me E-file and print my return for FREE. Caution: These companies obviously don’t do this out of the goodness of their hearts, and they offer many “Value Added” components (for a price) which you may or may not need.

Is it secure? The site I picked displayed the gold padlock in my browser frame indicating that the information being transmitted was encrypted with a 128 character cipher key. This means that an unscrupulous person would need to guess a 128 character “password” in order to see your data. You allow your CPA to see it without a password, so just use common sense, close other windows, make sure the firewall is turned on and an Anti-Virus program is running.

Merry Christmas and have a great April!

PS: Looking for that something different for Christmas? Something that says “I put some thought into this rather than picking up another necktie.” Then get that special someone one or both of my books for a joyous holiday gift. One will help them with their computer issues and the other will let them pat their tummy and say “Ah, that was good!”

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