Taxes: It’s that time of year again
that many people fear and dread; however, preparing your
taxes needn’t take hours and hours, or create a lot of undue
stress in your life. A little preparation and organization
throughout the year and the whole experience can take as
little as a few hours, nothing more. Here are a few tips to
take into consideration when preparing and organizing to
file your taxes for the year:
There are many software
programs available on the market today that do very good job of
figuring your taxes. In fact, these programs are the same kinds of
programs that professional accountants and tax preparers use. For a
fraction of the cost you might pay a professional to prepare your
taxes you can safely and thoroughly do the job yourself. The
following tips can help you prepare for tax-time.
1. Label several envelopes and keep all appropriate receipts in them throughout the year. You should consider making a list of labels for the following categories:
Education, Medical and Dental, Taxes and Interest Paid (e.g. property taxes,
interest paid on home loans, DMV expenses, etc), Charitable Contributions (including miles driven for charitable purposes), Income,
and Business Expenses.
2. By using an experienced and licensed tax preparer you will usually end up saving more money than by trying to do your taxes by yourself. There are several computer software programs on the market today to help you figure your taxes, which actually do a very good job of catching all the possible deductions allowable for you. They are very reasonably priced, and if you have saved your receipts in an orderly fashion throughout the year, sitting down and going through the questions using these programs will be effortless and painless compared to doing it all by hand. The whole process is rather quite simple and you simply print everything right there at the computer in your own home.
3. If you are receiving a tax refund, and are not in a position where you are in desperate need for your money, then using the option of e-filing you return may be a good
idea. The refund comes very quick. However, if you are not in need to have the money right away, then simply sending the paperwork in and waiting the six weeks will save you the fee involved with filing it electronically.
4. If your situation throughout the year has many complicated issues such as many stock transactions, trust accounts, and other issues requiring the expertise of a tax-savvy person, then you
may be better off using a professional and experienced accountant. Do not be afraid of using them, or of the fee they may charge. In the end they
typically save you more money than the amount you pay them for their services.
5. Be accurate in your accounting and in saving your receipts. As the
saying goes, "the devil is in the details" and the more careful you
are at documenting your transactions the cleaner and more settled
feeling you will have in the end.