Browse Instructions
How to file US Federal Income Taxes using TurboTax
Posted By: dbridges;
Category: Government & Politics;
February 6, 2010
Author Dr. David Bridges;
A complete guide to filing your own US Federal Income Taxes using the latest TurboTax program from Intuit Software.
1
The first step in filing your own taxes is to gather all of your receipts from the tax year you are working on. If you are a business owner, your receipts should be sorted by type of expense (ie: advertising, insurance, office expenses, telephones, equipment purchases, cost of materials, payroll and employer costs, etc). If you are not a business owner, you will still want to gather your receipts to prove these expenses (sales taxes paid, medical and pharmacy expenses, educational expenses, etc). This is good time to talk about receipts.
As you work through any year, you should be saving nearly every receipt you can (even if you are not a business owner). To save time when you begin to file your taxes, it is best to regularly sort your receipts by type of expense. Be sure each receipt is from the tax year you are filing and is clearly marked as such. During the year I find it best to make a few small notes on each receipt to remind me of the purpose of the expense.
You can deduct every penny of sales taxes and interest you paid during the tax year. Not everyone qualifies for Itemized Deductions, but without all of your receipts, you will not know if you qualify. TurboTax will ask questions to determine if you qualify.
For business owners, it is critically important to keep every receipt for everything purchased. Now that you have your receipts sorted by type of expense, you are ready to total them up. Total each type of expense on a single sheet of paper. Save every receipt in a secure file in case you are audited by the IRS. These receipts should be saved for at least 10 years.
You will also need all of your income statements (W-2, 1099, 1099 misc, etc.) as well as interest paid statements (mortgage, auto loans, cash loans, etc.).
As you work through any year, you should be saving nearly every receipt you can (even if you are not a business owner). To save time when you begin to file your taxes, it is best to regularly sort your receipts by type of expense. Be sure each receipt is from the tax year you are filing and is clearly marked as such. During the year I find it best to make a few small notes on each receipt to remind me of the purpose of the expense.
You can deduct every penny of sales taxes and interest you paid during the tax year. Not everyone qualifies for Itemized Deductions, but without all of your receipts, you will not know if you qualify. TurboTax will ask questions to determine if you qualify.
For business owners, it is critically important to keep every receipt for everything purchased. Now that you have your receipts sorted by type of expense, you are ready to total them up. Total each type of expense on a single sheet of paper. Save every receipt in a secure file in case you are audited by the IRS. These receipts should be saved for at least 10 years.
You will also need all of your income statements (W-2, 1099, 1099 misc, etc.) as well as interest paid statements (mortgage, auto loans, cash loans, etc.).
2
Now purchase the latest version of TurboTax for the tax year you are filing. This program can be purchased on-line (www.turbotax.com) or at any office supply store (Office Max, Office Depot, Staples, etc.) and most variety stores (Wal-Mart, Target, K-Mart, etc.). There are a few versions available ranging in price from $29.99 to $59.99. If you are filing a basic IRS 1040 form, including 1040EZ, the basic version of TurboTax works well. If you are a business owner, you will need the version for businesses. This is important because of the additional deductions afforded business owners. Any of these version will be available at most locations.
3
Before loading the TurboTax program on your home or office computer, close all programs. Insert the TurboTax disc in your computer CD drive. The download program should start automatically (be patient with it). If the program does not automatically begin downloading, go to "Start", "Browse", CD Drive, "setup" (this is rarely required). The download program will ask you a few questions.
You will be asked where you would like to store the program on your computer. The program will automatically suggest a storage area and that is fine for most users. If you are more advanced, you can decide where the program will be stored on your computer (this is also rarely required).
After answering all questions asked by the download program, TurboTax will open and ask you what you want to do.
You will be asked where you would like to store the program on your computer. The program will automatically suggest a storage area and that is fine for most users. If you are more advanced, you can decide where the program will be stored on your computer (this is also rarely required).
After answering all questions asked by the download program, TurboTax will open and ask you what you want to do.
4
Choose "prepare new tax return" from the menu. You will then be asked if you want to transfer personal information from a previous version (year) of TurboTax. If you used TurboTax the previous year and saved it on your computer, the latest version of TurboTax will transfer your personal information (names, address, SS numbers, etc.) to the current year return. Be sure the personal information is correct and up to date. Any incorrect information can delay the processing of your return by the IRS.
Pay particular attention to the Social Security Numbers. If any of the numbers are incorrect, you will have problems with the IRS in the future. At the very least, your refund will be delayed or denied if your Social Security Nuimbers are entered incorrectly.
Pay particular attention to the Social Security Numbers. If any of the numbers are incorrect, you will have problems with the IRS in the future. At the very least, your refund will be delayed or denied if your Social Security Nuimbers are entered incorrectly.
5
Now follow the on-screen instructions and answer the questions TurboTax asks as you go through the program. The prompts are very clear, however if you are not sure what is being asked, click the "help" button and an explanation will appear in a small window. You can even see examples in the help window. Enter all of your income and expenses according to the TurboTax prompts.
As you enter information there will be a window at the top of the page showing your projected refund or tax due. Don't worry if the "tax due" number is large at first. It will likely go down as you enter expenses and deductions later.
As you enter information there will be a window at the top of the page showing your projected refund or tax due. Don't worry if the "tax due" number is large at first. It will likely go down as you enter expenses and deductions later.
6
When you have ansered all questions and entered all income and expenses, TurboTax will run an "error check" to look for potential problems with your return. After the "error check", you will be asked to correct any problems and run "error check" again. When any and all errors have been corrected, TurboTax will complete the return and ask how you would like to file your return with the IRS.
7
You may choose to file on-line or by regular mail. Either way, be sure to print at least one (1) copy of your return for your records and keep for ten (10) years.
If filing on-line, you will need to verify your identity by electronically signing your return. TurboTax does this by asking for information from your previous year's return. Enter the information asked by TurboTax about your previous year's tax return (you will be asked what amount is on a line of the previous year's return). This is how TurboTax proves to the IRS that you are the owner of that tax return. When filing on-line, you do NOT need to send copies of your return, W-2's or anything to the IRS. You DO have to keep your W-2 and/or 1099 copies with your tax records and receipts in case you are audited by the IRS.
If filing by mail, you will need a full copy of your return (in addition to your file copy). Attach the "Federal" copies of your W-2 and/or 1009 forms to the back of your printed tax return forms. TurboTax will give you the address of your nearest IRS location for mailing. If you have taxes due, you will either need to put a cashier's check, money order or personal/business check in the envelope with your return, or file a "Request for Automatic Extension" form (also in the TurboTax program). This extension will allow you to file by April 15th even if you don't have the money to pay the taxes due at the time of filing.
If filing on-line, you will need to verify your identity by electronically signing your return. TurboTax does this by asking for information from your previous year's return. Enter the information asked by TurboTax about your previous year's tax return (you will be asked what amount is on a line of the previous year's return). This is how TurboTax proves to the IRS that you are the owner of that tax return. When filing on-line, you do NOT need to send copies of your return, W-2's or anything to the IRS. You DO have to keep your W-2 and/or 1099 copies with your tax records and receipts in case you are audited by the IRS.
If filing by mail, you will need a full copy of your return (in addition to your file copy). Attach the "Federal" copies of your W-2 and/or 1009 forms to the back of your printed tax return forms. TurboTax will give you the address of your nearest IRS location for mailing. If you have taxes due, you will either need to put a cashier's check, money order or personal/business check in the envelope with your return, or file a "Request for Automatic Extension" form (also in the TurboTax program). This extension will allow you to file by April 15th even if you don't have the money to pay the taxes due at the time of filing.
8
Finally, you will be asked how you would like to receive any refund that may be due. You can have the IRS direct-deposit your refund to your checking account (the fastest way), or receive a check in the mail (the slowest way).
Be sure to save a hard copy of your return, all W-2's and/or 1099's, all receipts and the TurboTax disc. I find it best to keep them all together. Since the IRS changes rules every year, you will need a current version for each tax year.
Be sure to save a hard copy of your return, all W-2's and/or 1099's, all receipts and the TurboTax disc. I find it best to keep them all together. Since the IRS changes rules every year, you will need a current version for each tax year.
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