If you can read this, you can do your own taxes.

I have before a prominently-placed advertisement from a local tax service, promising the "best" rates for tax preparation.  Rate for Form 1040 starts at a bit more than $200; Earned Income Credit form in the tens of dollars, $20+ dollars to use their software for e-filing from home, if you prepare your own taxes.  Audit defense services in the hundreds of dollars.

That's ridiculous.  If  my family outsourced our tax preparation to this firm, it would increase our income tax costs by roughly one-third, and only save a few hours of my time.

The worst part of the work in tax preparation is in gathering the information that you need, and in organizing it for easy reference.  I always make a one-page summary of the most important information, and I pull out the previous year's tax return for comparison. Once you've done that, you might as well do the easier part yourself.

Now, let's get back to the ad:  the IRS has e-file options, some of them free.

The Earned Income Credit form is simple, you just have to follow the logic through one step at a time.

Here is Form 1040.  And the Form 1040 Instructions.  Again, the secret is to go Line by Line, following the logic through. When in doubt, take the instructions as literally as a computer would; the first "computers" were people.

I always use paper wherever possible, because the entire process was designed to be done on paper.  Paper also provides greater privacy, which is particularly useful when you are working with intermediate rather than final numbers.

I usually do two full passes through the 1040 and associated forms; the first pass is to "trailblaze" my way through, note any changes compared to the previous year, and make sure that I have all the forms and information that I need.  I do my writing for this on separate sheets of paper, not on the actual forms.

That sets me up for a smooth second pass, where I figure the actual numbers, etc., that I will be entering on the forms.

Finally, I go through and fill out all the forms, make copies, and mail.

If you want to keep your income taxes and life simple, then be conservative in the deductions that you claim, and base them on very solid and ethically sound numbers.  You'll sleep better at night, and if you are audited, you will able to go in with confidence.

As the steward of your income, it is very important that you understand which deductions are available to you, and how to claim them.  That is something that you cannot outsource every single year, because it can affect so many other decisions that you make.  All those convolutions of the tax code were designed to be incentives, in one way or another.

The IRS doesn't care at all if you claim too few deductions or credits, or pay too much in income tax.

And if you make a minor mistake, all they will do is send you a letter and tell you.*

 

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* Subject to change under the Biden administration.