Money and Finance

Doing taxes is probably the single most dreaded thing that comes every year for many Americans. Many people choose not to deal with it themselves and they pay others to do their taxes by using expensive either computer software that you have to buy every year, or they simply hand their papers off to the local H&R Block professional. But what people don’t know is that there are many free online tax filing tools that are easily accessible and easy to use. These tools are found online and will change the way you do taxes forever. But, at the same time, many free tax filing tools online are not really free, and it’s difficult to determine which ones are legitimate.

For starters, there is a new free version of the well known tax preparation software, Turbo Tax that will almost do your taxes for you if you can plug in the numbers. If you are fairly young and don’t have any children or complicated tax related issues, this free tax preparation software is the perfect thing for you. Turbo Tax Free Edition will help you fill out simple tax forms like the 1040EZ and other simple returns. It might be useful to note that only filing federal taxes are free while you have to pay for filing state taxes.

A lot of websites try to lure you in by advertising free tax filing in order to try and get you to buy other products like mutual funds, individual retirement accounts, or a refund anticipation loan. Now IRAs and mutual funds may be the right thing for you but a RAL is the real scam. These companies will tell you that you will get your tax refund within 24-48 hours with their website, but they are really offering loans. These loans can be risky and even if you don’t get your anticipated refund, you will have to pay off the amount of the loan. If you choose direct deposit for your refund, you should get your refund in 7-10 days so an RAL is unnecessary.

It might also be useful to mention that anyone with a valid military license is entitled to free tax filing and tax assistance, including free electronic tax filing from VITA, the Volunteer Income Tax Assistance program.

Free taxes may be a tempting deal that you might want to rush into, but you have to be wary of scams that might land you in debt.

The 1040EZ form has been around for quite a while and each year the form is available to help people file their taxes it does change somewhat from year to year. The form 1040EZ does have some new directions for 2006 and the following information will be very helpful for those filing their 1040 EZ.This tax form is specifically for those people who don’t need to file the typical tax return, but do need to file their taxes. The 1040 EZ is a lot shorter and easier to understand. In fact, it is so easy that anyone can fill it out. It is important, however to read the instructions and understand what is required each year. For the year 2006 individuals who file the 1040EZ may request their refund by telephone. Individuals who are eligible to file this form may order the form by phone, on the Internet at IRS.gov, and at several other locations as well.

Individuals who are eligible to file the 1040 EZ may file electronically, which is what the IRS encourages people who qualify to file this way to do. The Free File program is available to these individuals so they can file their taxes without having to pay a fee. The Free File program is new for the 2006 tax year and it is believed that there may be as many as 10 million taxpayers who qualify to file this form who are typically required to file their taxes. Actual amounts may be requested by attaching form 8913 or the standard amount may be requested by taxpayers.

These new elements of the form 1040EZ for 2006 are important for taxpayers to know so they can file their taxes appropriately and do so correctly. Avoiding mistakes means a quicker refund and a quicker and easier experience when it comes to filing taxes. If you are wondering whether or not you qualify for the 1040EX then go ahead and check out the directions to see if you qualify. You can quickly read over the instructions and determine if the 1040EZ. If you do qualify then you can fill out the form, file it, and receive your refund if you are to receive one fast and easy.

There are a lot of tax forms and it can be difficult to keep them all straight. One of them is the form 1040A for 2006 and it is important to know about the changes this form has for the current tax year. Most tax forms change from year to year at least a little bit so keeping up with the new information is critical in order to file your taxes correctly.One of the new elements of the 1040A is that individuals who paid federal telephone excise tax on their long distance service may be able to receive a credit. Something else new is that the form 1040A has an increased AMT, or alternative minimum tax exception. The amount for 2006 is $42,500 or $62,550 for those married filing jointly or $31,275 for those married and filing separately. Those who were on jury duty may report their income on the form 1040A. Those who paid their jury duty to their employers may possibly be able to deduct it. Any penalty from withdrawing money early from savings may be deductible on the form 1040A. The Earned Income Credit may be taken for those who have a child that lived with them and earned $36,348 or less or $38,348 married filing jointly. Or, those who did not have a child living with them and earned $12,120 or less or $14,120 married filing jointly.

More people may be able to get the credit because the maximum AGI is higher for 2006. Take the credit if your AGI is less than the amount that is applicable to your income. Those who have an investment income of $2,800 or less may qualify for the credit. Those with more investments do not qualify. Some last minute changes were made by Congress and only the long form has all the information that allows you to get all the tax deductions and credits. These include deductions for higher education tuition and fees as well as deductions for educator expenses.

Knowing this information about the tax form 1040A will help you file correctly for tax year 2006 and take advantage of all of the deductions and credits available to you.