Wouldn’t it be great to get a few extra tips on how to file your taxes? Filing your own individual tax form can be intimidating, but today there are many ways to make your tax filing faster and easier. With a basic knowledge of things to avoid, tax filing is can be much simpler than you might think.
Although some tax preparers have a deep knowledge of their field and really know their stuff, you typically don’t know if you’ll be assigned to a seasoned and competent preparer, as this is the luck of the draw and done behind closed doors. And unfortunately, many are not professionals; like fast-food workers manning the express counter, they’re quickly trained for tax season. Charging hundreds of dollars in fees, they will ask you the same questions you could fill in yourself. Some suggest shady deductions in an effort to “help” you. Others may hurriedly mistype 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 possibility of being called in for a complete IRS audit. By that time, the tax preparer’s storefront doors have been closed for the season, and you’re on your own.
Another great tip on filing taxes, and probably one of the most important, is having receipts of all your purchases. Make it a habit to get a receipt for every purchase, even if you don’t think it is important. This way, 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 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. If you paid someone to care for a child or a dependent so you could work, you may be able to reduce your federal income tax by claiming the Credit for Child and Dependent Care expenses on your tax return.
This credit is available to people who, in order to work or to look for work, have to pay for child care services for dependents under age 13. The credit is also available if you paid for the care of a spouse or a dependent of any age who is physically or mentally incapable of self care. Here’s one easy-to-remember tax tip – start early!
Even if you haven’t received your W-2s, your final pay stub will have the pertinent tax information, such as your income to date and how much has been withheld. You also can go online and download any state and federal forms you’ll need (HYPERLINK “http://www.bankrate.com/brm/itax/state/state_tax_home.asp” t “_blank”).
Taking an advance look at your tax situation will help you know which issues might apply to your return. Taking an early start on filing your receipts, knowing which will be eligible for deductions, and getting an experienced tax preparer will help you to get as much money back as possible.
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