Tax season is upon us. Unlike Tax Day 2020, which was delayed two months, Tax Day 2021 falls on April 15 as usual. With the current state of the world, more people than ever are planning to file their taxes online in 2021. If you’re one of them, here’s what you need to know about filing your taxes online this year.
1. Get a Head Start
I can’t stress enough the importance of getting a head start on your taxes, especially with all the changes during the past year. The more prepared you are, the better. Read the full guide to get going before April 15.
2. Take Stock of Big Changes in the Past Year
We all experienced change in 2020. Maybe you lost income, moved, filed for unemployment, changed jobs or had a child. No matter what happened last year, there’s a good chance it’ll impact your taxes. Make a list of every change—big or small—before you file your taxes online. Most online tax tools will ask you questions about these changes, but your list will help you stay organized.
3. Download W2s and Important Documents
Most employers offer digital W2s in addition to the paper copies mailed to your home. Download your W2s, 1099s and any other important tax documents ahead of time and save them in a folder so you’re ready when you file your taxes online. Many tax tools, such as TurboTax, can even import your W2 with some basic information or pre-fill when you upload the digital copy.
Identify Fees Up Front
Tax-preparation software, platforms and tools, such as TurboTax, H&R Block and e-File, have free versions, but most people end up upgrading to a paid tier to handle their unique tax situations. These options are generally more affordable than having your taxes prepared by a professional, but you still need to understand the fees up front so you don’t have sticker shock. If you file through any of the Rakuten partners above, you’ll earn Cash Back, which can offset a portion of your preparation fees.
5. Choose How to File
Online tax preparation has come a long way—even in the past year. The pandemic has changed many things, including the ways you can file taxes online. It used to be an entirely self-serve system, but TurboTax and H&R Block both now offer the option to have a tax expert support you or file your taxes for you from start to finish—and it’s actually quite affordable. I chose the hybrid option and consulted with a tax expert through a video chat. He was able to see my screen and help me through all the questions I had, and I was able to see him on a live video. The extra peace of mind was well worth the added cost.
6. Know How Your Filing Impacts the Third Stimulus Check
The next stimulus check will be based on either your 2019 or 2020 taxes—the most recent year on file. If your income changed between 2019 and 2020, you’ll want to take into account how it might impact the amount you’ll receive. Many people who received the first two stimulus payments may not be eligible for the third.
Keep these tips in mind and you’ll be well on your way to filing your taxes online in 2021. TurboTax, H&R Block and e-File are all Rakuten partners, and you can earn Cash Back if you file with them using Rakuten. Not a member? Sign up today to start earning on your first purchase.