Tax Prep 101 for Nonprofit Professionals

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You are receiving forms in the mail with strange titles like W-2 and 1099-MISC. The vacant storefronts in your neighborhood have been filled with places like H&R Block and Jackson Hewitt. This can only mean one thing. It’s time to file your taxes.

No one likes doing their taxes. I know many full-time professional workers who have a parent prepare their taxes. Others opt to pay someone to prepare their taxes. According to the National Society of Accountants, the average cost for basic tax preparation is $176. That’s 58 cups of Dark Matter Coffee, 16 months of Netflix, or…yeah you get the point.

I’m here to make the case you should take control of your own tax preparation. There are options to file your taxes for free or at a much lower cost than having an individual prepare them. Those who have basic income streams (W-2s from employers, 1099-MISCs from clients) will find these tools very easy to use.

There are a number of free or discounted programs that make the process of filing taxes pretty painless. While you’re saving money, you are also gaining a better understanding of your personal finances.

 

Federal Taxes

If you made less than $66,000 last year, you can electronically file your taxes for free on the IRS website. These software programs are incredibly intuitive, and most should be able to file their taxes in under 30 minutes.

The IRS has a page called “Do Your Federal Taxes for Free”, which has the full details about which programs are available depending on your income level. I prefer the TaxAct or TaxSlayer programs.

For Folks who made more than $66K, or have more complex income, there are software programs like TurboTax that make filing easy and intuitive.

 

Illinois Taxes

Our state does not offer a free electronic filing program linked with an IRS program. The fee for filing state taxes via the IRS program is around $20, depending on which software program you utilize.

If you want to file state taxes for free, fill out your tax form separately on the Department of Revenue site. The process is usually an easy translation of figures from your Federal 1040.

Filing your own taxes is an important step to taking control of your personal finances. Reviewing your financial information from the last year can answer some very important questions about how much money you are actually taking home, and where that money is going.

 

Disclaimer: This blog post does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction or filing.


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Brian Elmore
brian@ynpnchicago.org
Financial Analyst, Ann & Robert H. Lurie Children’s Hospital of Chicago Foundation
Brian is a Financial Analyst at the Ann & Robert H. Lurie Children’s Hospital of Chicago Foundation. He manages the financial framework around philanthropic funding of pediatric medical research initiatives. Prior to Lurie Children’s, Brian worked at PwC, performing financial statement audits of insurance and financial service companies. He is originally from the Philadelphia area, graduated from the University of Pittsburgh, and is a licensed CPA in the State of Illinois. Since moving to Chicago in 2013, he has become active in advocating for legislative transparency and social justice in city and state politics. Brian is a year-round cyclist, loyal supporter of the Philadelphia Phillies and Flyers, and frequenter of live music shows across this fine city.