At the beginning of January, PT Money featured a guest post by Matt Robinson telling everyone to file for free (a good read on how to save money on taxes). I saw it as a challenge to pay the minimum to do my taxes. This was my first time doing taxes, and since I don’t have a complicated situation, I began my journey by choosing TurboTax’s Federal Free Edition online. I could have chosen any company’s free federal filing option (H&R Block, TaxACT, etc.), but TurboTax was the first to pop into my head.
Plug and Chug
I gathered my W-2 form, 1099 forms, and student loan information and started plugging away. After spending 20 minutes answering easy questions and entering the amount on the W-2 and 1099 forms, it found $585 that I was going to be refunded. Sweet! I had adjusted my withholding in October, but even with 10 allowances, I wasn’t able to make up for the massive amount of taxes I had already paid.
I was given the option to file my state return online with TurboTax for $27.95, which sounded fairly reasonable considering that it asked me a million questions and automatically does the fancy calculations for me. I figured that trying to do my taxes by hand would take forever, but I was trying to save the money, so I had to at least try.
Free Resources to Save Money on Taxes
I found the state tax forms online through the state website, but using my paper and ink sounded like it was against the rules, so I started my journey of learning about all the tax resources available to me. The state website let me know that libraries have tax forms and that you can even request a mailing of the forms you need. I headed to the local library and learned another important lesson.
In addition to having all the tax forms, every year the library offers free tax filing help for individuals and families with low incomes. Technically I qualified because my half year income was below the threshold, but that seemed against the spirit of the rule.
I picked up the state return, and it was only one page. That’s it. I did have one question that I needed an answer for, so I headed over to the TurboTax Live Community, but none of the community answers left me satisfied. Then I found the best service ever. TurboTax is answering one free tax related question per person until January 31st. I typed in my question and minutes later received a call from Bob, who was extremely helpful and gave me the answer I was looking for.
All the figures I needed for the state tax form could be found on the federal return, which I was able to view online. I spent 10 minutes looking them up and writing them in the boxes. It felt like being back in 1st grade on a scavenger hunt, only easier.
They were going to charge me $28 for THAT? Those “fancy calculations” I thought they were going to do wouldn’t have saved me that much time after all. The most difficult part of the entire process was making sure I entered my name and bank information correctly (refund please!).
So I stuffed my state return in an envelope, stuck a $0.44 stamp on it, and put it in the mailbox.
I encourage those with relatively simple tax situations to give it a shot before going to a professional or spending money on expensive software. I challenge you to heed Matt’s advice and file your taxes for free. With all the resources out there, there’s no reason to pay someone else to do what is in reality a small amount of work. You’ll probably find that 10 minutes of your time is worth the $28 in savings.?
This is a guest post from Daniel Packer of Sweating The Big Stuff. Daniel writes about negotiating, budgeting, and currently saves over 50% of his take-home pay while paying off his student loans. To read more, subscribe to his feed or follow him on twitter.