Online Tax Tools Help You Do More Than File Returns

| December 20, 2012

filing income tax online, efilingIf you’re planning to electronically file your taxes this year, you’re in good company. Forbes magazine reports that the IRS has passed the 1 billion mark in the number of people who have used the federal e-filing system, whether through an accountant or online service.

But the Internet can help you do much more than file your returns. Check out the following online tax tools to assist you with the Earned Income Tax Credit, charitable deductions and more. And before you file, you should seek expert advice from an accountant — let Dex help you find professionals in your area.

Online filing tools

Tax time can be a breeze with online services like TurboTaxTaxACT and others. Fees vary, but they all work in basically the same way: An interactive tax calculator helps you input earnings and deductions, calculates your refund (or the amount you owe) and electronically files your return.

Other useful features include importing W-2 and 1099 forms and setting up electronic deposit or debit with the IRS via your bank account. Some sites will even retain your information from year to year with free or fee-based registration.

Be aware, however, that the more complicated your filing, the more it will cost. Typically, only your federal filing is included — there may be additional charges to file your state return. Do your homework to avoid surprises in the overall price and find out which online service is best for you.

The IRS website offers free alternatives for both federal and state returns. Check out the IRS Free File page, along with a list of participating states where you can e-file both your federal and state returns for free.

Estimate IRA contributions

IRA contributions can reduce your tax liability. The TurboTax IRA calculator helps you estimate and make the most of your contributions. You should also check out your retirement plan provider’s website because they may offer online tools as well.

Calculate charitable deductions

If you’re not sure how to determine the value of your used clothing, furniture or other types of household donations, can help you find the fair market value of more than 20,000 items. The site uses official eBay market data and complies with IRS guidelines. Read more about fair market value in IRS Publication 561.

EITC and AMT assistants

Do you qualify for the earned income tax credit (EITC), a benefit for people who have low to moderate wages? Are you subject to the Alternative Minimum Tax (AMT)? The IRS website has tools to answer both of these questions.

The EITC Assistant:

  • Helps you determine if you’re eligible
  • Lets you know whether you have a qualifying child or children
  • Estimates the amount of your tax credit

There are two steps involved with the AMT Assistant. First, you need to complete a simple questionnaire based on your 1040 statement to find out if you’re subject to the AMT. If you are, you’ll have to complete Form 6251 to learn whether you owe the AMT.

IRS rules can change from year to year, so be sure to review the IRS website or ask your accountant for the latest information and guidelines.

Where’s my refund?

Finally, after you’re done filing your taxes and breathing a sigh of relief, you’ll probably want to know when to expect your refund. The IRS offers an online tool for this too. Simply input your Social Security number, refund amount and filing status, and the site will give you the estimated date.

When filing your taxes, there’s no substitute for expert advice from a professional. Before you begin, check out the DexKnows accountant resource guide with local listings.

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Category: Accountants & Tax Preparers, Taxes

About the Author ()

Katy is a Chicago-based journalist with an eclectic background in print publishing, web design and paralegal work. She's been writing and editing web content full time since 2010.