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Timing, how you file and pay all add to tax bill

Do your research to avoid losing even more money from paperwork costs.
Tax Preparers Work Night Shift As Tax Deadline Nears
There are more options than ever in terms of how do-it-yourself taxpayers can prepare their forms and file, pay, and take their refunds.Tim Boyle / Getty Images file
/ Source: Reuters

Paying taxes is bad enough, but did you know you could lose money filing your taxes? Be careful how you file and how you pay your bill, if you don’t want to add insult to injury.

This year, there are more options than ever in terms of how do-it-yourself taxpayers can prepare their forms and file, pay, and take their refunds.

Here’s how to file without getting soaked.

Getting your forms prepared. If you earn less than $50,000 a year, you can start at the Internal Revenue Service Web site,, and check out the free file program. You can use online software and file your taxes electronically, without a charge. If you make more than that, there are still Web sites that offer free or very inexpensive online filing.

TaxAct ( offers free preparation and filing for federal forms, but you’ll have to pay $12.95 to do the state return. For those earning under $100,000, SnapTax ( is free for preparation, though there is a $5.95 e-filing fee and a $14.95 state tax fee.

Even the big-name tax programs have various options for saving money on tax preparation. TaxCut ( and TurboTax ( offers free online filing and reduced prices if you use the online versions of their programs instead of downloading it to your computer or buying the disks.

And don’t wait until the last minute: TurboTax says it’s going to raise prices on April 1 for procrastinators. Even if you finish your online forms before then, you’ll pay a higher fee if you neglect to file until after that date.

If you’ve got a big, complicated tax return, don’t cheap out on the least-expensive option. The higher-end programs offer more online and live help from tax experts.

Finally, if you want professional advice but don’t want to pay to have every form filled out, you can do your own taxes with a program, and hire a pro to look over your return and offer tax advice for next year.

Can’t find a high-quality expert willing to do that before April 15? Go ahead and file, then have your return reviewed after April 15th, when the best tax preparers have more time on their hands. If the pro finds more savings, you can file an amended return.

Getting your forms filed. It’s true that the IRS wants you to file electronically, but that doesn’t mean it’s necessarily a better deal for you. The cheapest way to file, if you owe money, remains writing a check and filing and paying by mail, posting your return on April 15th. If you are getting a refund and want to file online, consider one of the online programs listed above that have free e-filing.

Paying your bill. If you owe taxes, it’s rarely a good deal to pay them with a credit card; there is typically a 2.49 percent fee tacked on.

This year, MasterCard and VISA are both pushing a variety of special deals for folks who pay with a card. But the deals are complicated, may involve third parties (such as having to use H&R Block to do your taxes) and in the end, don’t save you much. This method is certainly not worth doing to get the free points offered by most rewards programs.

If you don’t have enough to pay your taxes, consider shifting money: Charge other expenses, like groceries and use the money retained in your checking account to pay your taxes.

If you owe more than $2,500, it might be worth using a zero-interest convenience check offer from your credit card, depositing it into your checking account, and writing a check to Uncle Sam. You’ll still pay a cash advance fee, but at higher amounts, this might still be a cheaper option. Or, if you are confident of your ability to repay it quickly, get a loan from your home equity line or 401(k) plan. If you find yourself in a big mess, contact the IRS and see if you can negotiate a payment plan.

Getting your refund. Don’t clutch at those refund anticipation loans. You’ll pay hefty fees just for getting your money a few weeks early. If you’re in a hurry for a sizable refund, file electronically and check off the direct-deposit option on the tax forms. The money should be there within two weeks.

Finally, if you’re a TurboTax user, you can take advantage of cross-marketing efforts by taking your refund in gift cards and adding a match from the retailers participating in the deal. Some of the deals are good; FTD, for example, will match 100 percent of the amount of your refund that you take in FTD cards for floral and gift orders. So you might be able to stretch your refund, but ... (of course there is a but...) shipping and handling fees apply, so nail down the specific fees and matches before determining whether the card you’re looking at is worth it.