Money, Debt and Taxes

Tax time is here! It is bad enough just needing to file one tax return, but what if you have unfiled back tax returns and unpaid taxes? Having unfiled tax returns can be very stressful. The IRS can make your life miserable. They can garnish your wages, put a lein on your house, and even lock up your bank account so you can’t get at your money! Also, know that when you have unfiled tax returns, that tax year stays “open” and available for audit for up to 3 years after you do file your tax return. And every year you don’t file and pay your taxes, penalties and interest are adding up.
So what do you do if you have back taxes and unfiled tax returns?

Filing back taxes is not something you want to do on our own. There are ways to reduce your IRS tax debt, but you have to know the best way to approach the IRS. At the very least you should do some research about all the options available to you.

I have just found a site that can be a great resource. Back Tax Help has an extensive amount of content that you can use to research your particular tax problems. What I really like is they have a number of guides that will walk you through filing back tax returns and paying unpaid taxes. If you don’t have time to do the research, or you don’t want to go it alone, they also offer professional services to help you with your tax problems. So don’t wait any longer. Make this the year you file your back tax returns and get rid of that stress forever.

Free File is back for 2008. Once again, if your income is under $56,000, you can prepare and e-file your federal income tax return for free. But be careful before you choose a company. Most will charge you to prepare a state return, and one company, TaxSlayer.com is advertising free income tax preparation, but if you want to print or e-file your taxes, there will be a fee.

The IRS’s Free File Page has a good list of companies, and their restrictions. Make sure to read the fine print, because companies may have different restrictions based on income, age, or what state you live in. In fact, if you live in a state without a state income tax, you may have difficulty finding a free file site.

Here are my top picks for free Tax Filing.

If you don’t need to prepare a state income tax return, start with the big names.

H&R Block’s TaxCut Free File: Free federal online tax preparation and e-file if your adjusted gross income is $56,000 or less and you are age 50 or younger. Includes Form 982 (Mortgage Forgiveness Debt Relief).If you have to do a state return, it will cost you $29.95 at H&R Block. You can find a better deal elsewhere.

If your income qualifies, (under $30,000 or active military and under $56,000)  look at Turbo Tax.  In addition to free federal tax filing, they offer free state tax filing for residents of AL, AR, AZ, GA, ID, IA, KY, MA, MI, MN, MO, MS, NY, ND, NC, OK, OR, RI, SC, VT, WV. Or just $9.95 if you live in a state that does not have a free file program.

TurboTax® Freedom Edition: Free federal tax preparation and e-file if your Adjusted Gross Income is $30,000 or less or you are active military or you qualify for Earned Income Tax Credit. Includes Form 982 (Mortgage Forgiveness Debt Relief).

You may not have heard of  TaxAct. But they have been a supplier of professional tax preparation software for some time.  They charage $13.95 for a state return, and a federal return is just $7.95 if you don’t qualify for the free program.

Free TaxACT: Free federal online tax preparation and e-file if your adjusted gross income is $56,000 or less and you are age 19 through 55 years old. Includes Form 982 (Mortgage Forgiveness Debt Relief).

Liberty tax service may be a good choice.  State returns are just $9.95  and if you don’t qualify for the free federal,  your federal return is just another 9.95. They also online tax preparation in spanish.

eSmartTax From Liberty Tax Service: Free Federal online tax preparation and e-File if your adjusted gross income is $56,000 or less, and you are age 50 or younger. Includes Form 982 (Mortgage Forgiveness Debt Relief). En Español.

Free tax services are only good to use if you have a fairly simple return. If your return is not simple, you should consider hiring a professional. Many times you will save more money in taxes, than you spend on tax preparation, just by having someone who spends the whole year studying taxes.

Should you be buying stock now? The markets are at the lowest levels they have been in in years, and with careful research, you may be able to find some bargains. However, what stops many small investors, is the high cost of stock trading. A traditional broker can charge more than $50 per trade, making it difficult for the small investor to make any profits even with a rapidly rising market. The answer for many people is online trading.

I have been trading online for close to 5 years now. When I was looking for an online broker I looked at many different variables. How easy was it to trade? Was there a minimum deposit required to open an account? What were the trading fees? I wanted to get into stock trading, but I didn’t want to have to invest large amounts of money.

The online broker I eventually chose was Firstrade.com. I have been with them for many years now and have been very happy. They are easy to use and have no minimum deposit requirements. And the commissions are low. Currently just $6.95 per trade.

The old adage is to buy low and sell high. This may be a good time to buy stock. Be sure to do your research and start small until you can some skill and knowledge.