Five Tips For Successfully Preparing Your Own Taxes
If you have a simple tax situation- i.e. wages and not much else, then filing your own taxes is your best bet and should be pretty straightforward. You can easily file online through many software solutions, and the information of how to prepare is out there. Although if you're not careful you can also get yourself into trouble. So it's good to know when you are over your head and get professional help, more information on when you need a tax preparer is available here.
How to file your own taxes:
Report every number on a form.
Every item on a form is important and belongs somewhere in the tax return. If you can't find where to put it ask someone... call the software company- don't guess.
Double check the information you put in.
You can use colored check-marks next to every number to show yourself you verified it a second time. Takes two seconds to double check but hours-if not months- to fix a mistake.
Don't get over-complicated.
There are thousands and thousands of tax laws out there, you can get lost reading laws that have no bearing on your situation. Most answers to basic questions can be found in the IRS Pub 17 (http://www.irs.gov/uac/Publication-17,-Your-Federal-Income-Tax-1)- the publication that most tax preparers refer to daily.
Be careful filing state taxes.
State tax laws often are more complicated than the IRS, and harder to find information to file properly. Most software programs will file state and have done the research for you to make sure things go in the right places, but charge extra for this. Also remember that just because you don't owe the IRS doesn't mean that you won't owe the state, I've seen a lot of people get into trouble with thinking that they don't need to file and then getting audit letters with huge penalties a year or two later- don't let this happen to you!
Tracking your tax return.
Often times with the IRS, no news is good news. After you've filed your tax return you can track your refund status- here is a links page that will take you to the IRS and your state to check on the status of your refund:
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Who Really Needs Professional Tax Help?
Taxpayers in the following situations may especially benefit from hiring a tax preparer:
Owners of rental real estate. (Schedule E)
Sale of real estate or business. (Form 8949)
Cancellation of Debt. (Form 982)
Partnership, LLC, LLP or Limted Partnership. (Form 1065)
Corporations (Forms 1120 or 1120S)
Foreign Earned Income Exclusion (Form 2555)
Foreign Corporation (Form 5471)
Online Special: Tax Preparation: Enterprise At 1st Tax there are no hidden costs. These flat rate tax return preparation fees cover what most small business owners need to have their taxes prepared.