Ever watch someone make three right turns instead of a left? Well, in the same way, you could be doing your taxes the long (and grueling) way. Take this five-minute quiz to figure out if you can file comfortably by yourself or if the best way to file your taxes is with a pro.
Here's what that means for your taxes.
A global virus. Global shutdowns. Murder hornets (yeah—that happened). We’re glad 2020 is long gone, sure, but some of that craziness might affect tax season this year. Here are three big things to keep in mind.
If you had residence in one state, but you earned income in another, you may have to pay income taxes to both states. Yeah—whomp, whomp. This isn’t always the case (every state is different), but if you worked in more than one state last year, definitely look into how their state taxes work.
If you've received unemployment benefits, they might be taxable—or they might not! Rules have changed for 2020 taxes, so you need to know the income levels and your state rules to determine how you file.
Last August, the White House gave companies the option of deferring payroll taxes. If your company did this, you would have noticed a “bump” in your paychecks last fall. Well, that wasn’t free money: Unfortunately, you’ll notice smaller paychecks this year until you pay back the payroll taxes your company deferred.
The Best Way to File Your Taxes Now
When it comes to tax preparation, most people panic, put up two fists, and swing. We have a better idea—start with a plan. Follow these steps, and you’ll do your taxes the best way this year.
Use our checklist to gather everything you need.
Step one is easy (especially if you have our checklist). Gather all tax forms, like W-2s and 1099s, and keep them nearby.
Decide if you’ll take the standard deduction or itemize.
Taking the standard deduction is easier, sure, but if itemizing means you’ll have a lower tax bill, don’t be lazy. Just keep in mind you’ll need to back up your itemized deductions with receipts.
Pick a filing status.
How will you file? Jointly? Separately? Married couples usually save more by filing jointly. But sometimes it makes more sense to file separately, so always do the math.
Make a tax-filing playlist and do your taxes.
Let's face it. There's no Rocky without a good music montage. Bring together the songs that make you want to get your taxes done. Then, do them.
Set yourself up for success next year.
If you get a big tax refund or bill, go ahead and adjust your withholdings. Also, stay organized throughout the year, and you won’t have to hunt for everything you need each spring. Keep tax documents in one place, or receipts in one folder.
Ramsey SmartTax is a super simple way to file your personal taxes. Unlike most tax filing software, Ramsey SmartTax has transparent (and low) prices. No sneaky fees. No surprises.
Of course they can! We can put you in touch with a local tax advisor who can help you get back all the money you deserve.
Find a local, trusted tax advisor to help you.
Want to Learn More?
Did you know that some of your income isn’t subject to taxes? It’s true! Find out what income is taxable and what isn’t.
Here’s how tax deductions can shave hundreds, maybe even thousands, of dollars off your tax bill.
Knowing what tax credits you can claim on your tax return could keep more money in your pocket this spring.
Find out when it makes sense to file your taxes with a tax advisor and when you can probably do it yourself.