Making Tax Season Easy

It happens every year during tax season. For most people, it is a time of scrambling to organize everything together to file their taxes. Here, you will find tips and suggestions to make this tax season the easiest one and be done before the dreaded IRS deadline in April.

Start early

If you are doing a simple tax return, meaning you don’t itemize your return and have no investment income or losses, then you will only need your W-2 mailed to you no later than January 31^st. If you are itemizing your tax return, go ahead and have all your deductions listed on a “cheat sheet” for easy access once you have a method of filing nailed down.

Itemizing Your Deductions

For those individuals who will be itemizing their deductions, now is the time to start planning. As discussed before, you will need to go ahead and pull your information together as soon as possible. The most commonly used deductions you will need to gather information on are charitable donations, mortgage interest paid for the year, medical expenses, car tag renewal fees, and state sales tax.

If you receive self-employment income, you can also deduct a portion of your monthly utility bill, cable bill, internet bill, cell phone bill, and other business-related expenses. Remember that,t you c, can only deduct a certain percentage based on the size of your office and your house. For example, if your office is 10% of your home, you can deduct 10% of your bills.

Figure out how you want to file your taxes.

As a taxpayer, you need to figure out how you plan on filing your taxes early in the year. You have more options than ever to file taxes this year. Three popular ways to file your taxes are using tax software 2024 or a tax website, a tax preparer like H&R Block, or an independent CPA.

If you have an essential tax return, one in which you only need to report income from a job and are not itemizing deductions, then doing them yourself is the quickest, most cost-effective way. A great place to start is the IRS Free File section here: http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free(available Jan.22). At this IRS website, you will be able to choose a free tax filing program recommended by the IRS so you can eliminate less reputable websites or software providers. In my experience, I have always had great success using TurboTax for an essential return. TurboTax was always straightforward and never ran into an IRS problem. The advantage of the software is the ability to have total control over all the information you enter and the cost-effectiveness of filing. The downside is if you are ever audited, it will be on you and you alone to provide the information to the IRS.

Dealing with a basic tax outfit like  H&R Block can provide you the advantage of having someone handle an essential return and being there in case of an audit. The downside is they will take a percentage anywhere from 10% to -20 % of your total return for compensation, which will hurt your bottom line.

CPAs are best used for heavy itemization tax returns and exceptional tax circumstances. The great news is that you can sleep well with a CPA, knowing your taxes are being done effectively. The downside is they are the most expensive, often charging a flat fee more than a general income return.

If you have a more complex return requiring a high amount of item deduction or exceptional tax circumstances, hand it over to a professional. Remember, it is your name on the line, so if you feel uncomfortable dealing with a high amount of deductions or a unique tax situation, give it to a CPA and let them figure everything out for you, as that is what they are paid to do.

Don’t stop the momentum.

Once you have the required tax information and a particular way of filing your taxes, immediately start the process. This is the biggest key to success, which is starting early. Furthermore, the most significant issue people run into is the initial “enthusiasm” for doing their taxes, ting, putting it on the back burner, and before you know it, it is April, and you still are not done. My rule of thumb is once you get a tax document, enter that into your tax program or give it to the person doing your taxes.

Error check and then error check

The most common way you will ruin your tax season or create an audit situation is by not checking your work. All tax programs will do an error check, but it is ultimately up to you to ensure every number has been entered correctly. Even if you have someone prepare them for you, review all figures to ensure everything is correct. If you have given yourself enough time to review your return, you have enough time to review your work. Remember, it is your name on the line, not your CPAs or your tax software.

What if something goes wrong?

The worst fear of a taxpayer is either an audit or filing their taxes incorrectly. Not to worry, as everyone makes mistakes. This happened when my state failed to send me paperwork within the mandated time frame. The IRS offers a free tax return amendment form in most tax software suites. Please fill out the amended paperwork and the reason for the change, and that’s it. The IRS will notify you that they have received your changes and any calculated differences you owe.

By following these easy steps, you will have no problem this tax season. Just remember, it is all about starting early and finishing strong. Now it’s your turn. Did I miss anything? Do you have a tip that has made your tax season easy for you?