Many people approach tax time with dread. Tax forms can be complicated and cumbersome. You may want help preparing your income tax form. However, this expense is beyond many people's financial means. The federal government understands some people require free federal tax help.
Fortunately, various tax preparation programs are available at no charge for low-income earners. You can access these programs through the IRS website. The federal government has approved the tax software products on the IRS website. If you do a little research, you can find the tax software that will best meet your needs.
Tax software can help you fill in your tax form. The program will prompt you to fill in the required information, and the software will do many of the calculations for you. Some products are faster and easier to use. Other programs will be better are spotting mistakes.
You will have to earn a certain income level to qualify to use these programs. There are other restrictions. If you are filing a return on behalf of a deceased person, you cannot usually use free federal tax software. If you have declared bankruptcy, you will not be eligible. These programs are not appropriate if you experienced capital gains or losses.
You should file a tax return every year. Even if you earn less than the personal exemption, you should still do your taxes. The personal exemption is the amount of money you can earn free from federal tax. Sometimes you can qualify for certain tax credits if you file a form. The government allows you to deduct specific exclusions right off the top of your pay. These include health premiums. Some bonds are considered tax exempt, so you will not have to deduct the interest earned.
You can also claim child support, alimony, moving expenses, or charitable donations. These deductions can subtract a substantial amount from your earned income.
If you are paying the government too much tax all year long, you are giving the federal government free use of your tax dollars. You should adjust the amount deducted off your regular paycheque to ensure you are being taxed at the right level in the first place. Why give the government an interest free loan with your money, when you could put that cash to work for you.