How to File Taxes Under the Poverty Level
- 1). First, gather all the needed paperwork. All employers are supposed to mail off W-2s before the end of January. Some will make them available sooner than that. It's usually a good idea to have a big envelope or file folder to gather all the information you need for a tax return: W-2s; any 1099s for independent contractors (if this is the case you may want to consult a tax professional for deductible expenses as an independent contractor); 1098s if mortgage interest is being paid; and Social Security numbers and dates of birth for everyone on the return.
- 2). Now make the hard decision as to whether you can be patient and wait for the refund to be direct deposited into your bank account. If you don't have a bank account, or can't wait 10 days, your options will be limited to paying for a refund anticipation loan. The cash is there in 24 hours or less, but you will pay upwards of $300, with prep fees and bank product fees deducted from your refund.
- 3). Do a little research. On the IRS website you will find a list of IRS-approved sites for people under a certain income level being able to file for free. Be aware that if you stray outside the approved IRS sites, you may be submitting your personal information to an Internet phishing site, and you will never see a refund. These phishing sites pay a lot to be ranked high in the search engines, so don't trust rankings.
- 4). Check with the local Salvation Army, senior centers and others that offer free tax preparation and filing services. Make sure the center is aware of the background of their preparers; avoid free filing done out of the back of vans or buses.
- 5). Avoid the mistakes that lead to refunds being stolen through illegitimate services and the high costs of the RALs offered through franchised tax prep offices. Open a checking account and be patient for 10 to 14 days. That way you don't get taken advantage of and get more money back.
