Would you like to be able to do your taxes on your own? Working with a professional tax preparer is a smart, hands-free option. But it can also be expensive. On top of that, navigating your way through the tax filing process can help you have a better understanding of the nuts and bolts of the U.S. tax system. Further down the line, that might help you to be more strategic about investing and retirement. If you’d like to save a little money this year and find out why the IRS charges you what it does, then here’s how to do your taxes on your own.

Step 1 – Pick your method

The first step to doing your taxes is to determine how you will prepare them. The classic way is to get paper copies of the forms you’ll need and start filling them out manually. But a far easier way or more modern approach is to use tax preparation software.

Tax preparation software lets you file your returns electronically so that they’ll be received, reviewed, and refunded faster. The program walks you through all the steps and can also help you to find deductions and credits that you didn’t even know about. Additionally, there are lots of useful resources and even customer support if needed.

Step 2 – Gather your financial documents

Next, start collecting all the important files you’ll need to fill in the required information. This will typically include:

  • Social Security numbers for you and any dependents
  • W2s or other income statements from any side hustles
  • Bank or investment statements (including crypto trades)
  • Expenses related to school
  • Interest paid on your mortgage
  • Property taxes
  • Medical bills (if you plan to itemize)
  • Work-related expenses (if you don’t get reimbursed or work as a freelancer)

Step 3 – Determine your filing status

The IRS requires you to pick from one of five tax filing statuses:

  • Single
  • Married filing jointly
  • Married filing separately
  • Head of household
  • Qualifying widow(er) with dependent child

Note that if you’re married, sometimes filing separately instead of jointly can lead to a bigger return. Most tax preparation software will calculate it both ways and give you the option to change your status before filing if the refund is greater.

Step 4 – Begin filling out the forms

Time to buckle down and get to work! Taxes can take 1 to 2 hours to complete depending on the complexity, so block this time out and be free of any distractions. The usual starting point is a tax form called a “1040”. Whether doing them manually or electronically, this is where all the basic information about who you are and your income goes. If other forms are needed, the instructions will refer to them (or the software will prepare them automatically).

Step 5 – Don’t forget state and local tax returns

Once you finish your federal return, the job is not over yet. Remember to also file tax returns for your state and city (if applicable). This is another area where tax preparation software can save you time. Most programs will import all the important information from your federal return into the other ones so that they can be completed relatively quickly.

The bottom line

Doing your taxes on your own will not only save you some money but will also help you gain a better understanding of how the U.S. tax code system works. Get started by having your documents ready and choosing a good tax preparation software program. Then, block out about 1 to 2 hours, and don’t forget to also file state and city taxes too.