Ryan Vaughn explains what documents you need to file taxes and why the IRS automatically flags returns with missing information. He warns against handwriting forms, cautions that "free" tax software hides fees, and recommends hiring a professional if you have any 1099 or self-employment income.
How do I file my taxes myself? So what do you need to gather? I have some videos on YouTube titled What Documents Do I Need to File My Taxes, and these are things that you either get in the mail or you get an email notification saying here's your tax document, or your tax document is available to download off of wherever, right? So like your mortgage statements, if you do charitable contributions, interest income, the bank's going to send you those things. If you have stocks, more money in retirement accounts. Like, there's some forms there called 1099-Bs, W-2s, anything that you're getting, you're going to need those documents because it's important for you to know the IRS gets all of that information. It's one of the requirements when you're filing forms for people, you give one to the recipient and you send one to the IRS. So they build in their computer days this record, and so they actually use that to to determine in most cases if they're gonna audit somebody because that's an easy thing. Our system says— IRS system says, hey, these are the forms that should be on the return. When the return comes in and it doesn't look like all the forms are on there, it's literally 100% automatic audit, usually resulting in a simple letter saying you're missing this information, we think you owe this much in taxes, and it's usually higher than what you actually owe. If you're gonna do this yourself, definitely use software. Use a tax software. Don't fill out forms by hand. Don't go to the IRS website and download forms and fill them out by hand. You're for sure likely going to make mathematical mistakes. The forms are pretty stupid. You put in some information and then a lot of times it's do some math and then put this number on this line item and this line item needs to carry it over to this other form. Use a software program. Do not, if you are preparing your taxes yourself, For the love of all things holy, do not fill out forms by hand. I have never seen somebody fill a form out by hand that didn't later get a letter, and that's the reason they end up coming to us like, I messed up. If you're gonna do it yourself, then you're likely not looking at going into a place like some tax shops are open just during tax season, and they have like a location maybe in a Walmart. Or in a strip mall or something like that. In theory, that would not be the same thing as doing taxes yourself. But if you feel so inclined, let me just say, do you really want to use a company that needs to use gimmicky dance people that have nothing to do with taxes to actually file your tax return? Like, if you're considering doing it yourself, like, there's the full let me DIY it myself, or you likely should just use a professional who does it all year round. So there you go. There's some tips. You're doing it yourself. I can't create a video that takes my knowledge of what to do with taxes and give it to you so that you can do 100% perfect job and make sure you're maximizing tax savings. That is part of the trade-off. You're saving money theoretically, you're saving the fee, right, by doing it yourself. But check it out, like, make sure you understand the true cost of the tax software you're using. Is there a filing fee? Those companies who have the softwares also are really good at marketing, and you might have seen ads to talk about free, free, everything's free, and Well, there's fine print at the bottom of those ads that's small to read and usually doesn't stay on long enough for you to actually read the full thing. So be aware of the true cost of your software, because then if you look at the cost of a professional, you might be different by $100, $200, maybe even $500. You're filing one tax return a year. A professional's likely filing at least hundreds. We file tens of thousands of returns and we do it year round. So just keep that in mind. If you're filing your taxes yourself, there's probably gonna be a trade-off and I'm saving some money, but I'm likely gonna miss out on some tax strategies. Now I will admit, which a lot of accountants will, if your W-2 income, maybe mortgage statement, a few itemized deductions, maybe interest income, like no 1099 independent contractor income, you likely are going to get a very similar outcome on your taxes that a professional will. And so in that case, by all means, do it yourself. But if you have any sort of 1099 income, I just plead that you consider talking to a professional because most The tax code is written to benefit business. And if I'm an independent contractor, by definition, I'm a business. And so there's a lot of things that you just living your life, not being weird like we are, probably aren't reading the tax code or staying on top of all the strategies. So keep that in mind. Remember, if you do this yourself, the IRS still doesn't like you and they're not your friend. So, you know, they kind of suck. Just wanted to leave you with that. Little reminder.
