File Your Own Taxes
Filing your own individual tax form used to be intimidating, but today e-filing has made it as easy as completing an online response form. Ask anyone who's used TurboTax, Quicken, or other super user-friendly tax e-filing programs.
Especially designed for the personal tax novice, they basically sit you down and ask you how much you earned last year and how much you spent. Then they take you step by step through the process. There is no confusing fine print to read, or long schedules to look up and, if at any point you still feel lost - simply hit the delete button. No harm, no foul.
However, keep going, and it's almost guaranteed that you'll end up feeling like a tax "expert" before you've hit Submit.
Even with complicated forms, the most time you'll spend on filing your taxes with an e-filing program is about an hour ... to quickly send your tax form through cyberspace to the IRS.
Another advantage to e-filing? Tax refund checks are returned more quickly, meaning more money in your pocket much sooner than filing hard copy returns.
Be Careful of Those Storefront Tax Preparers
Although some tax preparers really know what they're doing, once inside the door it's the luck of the draw as to whether you'll actually be assigned to a compentent preparer. Many are not professionals, but are quickly trained for the tax season much like fast-food workers manning the express counter.
For fees reaching into the hundreds of dollars, they will basically ask you the same questions you can fill-in yourself. Some may suggest shady deductions in effort to "help" you. Others may hurriedly mis-type your address or social security number, raising red flags at the IRS.
If the IRS later questions you about your return, you may end up paying extra tax or possible penalties for any mistakes or questionable deductions. Not to mention the possiblity of your being called in for a - gasp - complete IRS audit. By that time, the tax preparer's storefront doors have been closed for the season, and you're on your own.
Keep Those Receipts
If you want to claim a deduction the most important part, say the experts is : receipts, receipts, receipts.
Make it a habit to get a receipt for every purchase (no matter how trivial you think it is at the moment) so when tax season comes around you can pick and choose among those that apply as legitimate deductions.
File your receipts away now, or just keep them in an old shoe box to sort out later. In the event of a tax audit, you'll at least have them on hand as black-and-white proof of money spent on the deductions you've claimed.
Again, it's the mantra of of saavy tax filers everywhere who make it a habit of asking the following question throughout the year, and everywhere they go.
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