Many people will gladly pay a professional to prepare their tax returns, deal with their tax headaches and give them advice, but some things you don’t necessarily need to pay somebody to do. Here are five common tax tasks you can do yourself, for free.
1. Find out how much you owe the IRS
You can find out whether you have a balance outstanding with the IRS and how much it is (plus your payment history) at IRS.gov/account. Signing up takes about 15 minutes, and the IRS says you’ll only need to verify your identity once.
“To access their information online, taxpayers must register through Secure Access, the IRS’ two-factor authentication process. This identity-proofing process rigorously protects sensitive information,” the IRS says.
2. Get copies of your tax records
The IRS provides five types of free tax transcripts that let you peek at its records on you. You can see most line items from your tax returns for the current tax year and the prior three years, for example, or get basic data such as your marital status, how you paid and your adjusted gross income for the current tax year and for up to the last 10 years. A tax transcript isn’t the same as a photocopy of your tax return. If that’s what you want, get IRS Form 4506 and pay the fee for each return requested.
3. Get on a payment plan with the IRS
If you need a little extra time to pay your tax bill, you may be able to set up a payment plan with the IRS. The short-term plan can get you an extra 120 days to pay with no extra setup cost. But pay your balance off as fast as you can because the IRS can hit you with penalties and interest until your balance is zero.
If you need longer than 120 days, the IRS has payment plans for that, too. But those come with setup fees that range from $31 to $225. Low-income taxpayers can get a break, and it’s generally cheaper to set up a plan online rather than by phone, mail or in person.
4. See if you can settle your tax debt
If you can’t pay your taxes, or if doing so creates a financial hardship, you may qualify for what the IRS calls an offer in compromise. That could allow you to settle your tax debt for less than you owe. Statistically speaking, it’s a bit of a long shot — the IRS agrees to fewer than half of the requests — but you can use the IRS’s prequalifier tool for free to see if an offer in compromise might be for you. Beware: The prequalifier tool is just the beginning of the journey — you’ll still need to complete a formal application (and there’s a $186 nonrefundable fee to do that).
5. Direct-deposit your refund
Direct deposit is a great way to get your hands on your tax refund faster, and it’s easy to set up — just supply your bank information on your Form 1040 or when your tax software prompts you to. Direct deposit is free; in fact, the IRS forbids tax preparers from charging a separate fee to set up direct deposit for clients. You can even route your refund directly into up to three different savings accounts, IRAs, health savings accounts or other investment accounts for free by filing IRS Form 8888 and specifying how much to put in which account.