Basic Finance Care Finance tips
It is said that the only two unavoidable things in life are death and taxes. Doing your taxes correctly is one of the biggest pains people suffer from every year. You can hire a professional to file your federal income taxes for you, but that will end up costing you a lot of money. Avoiding the stress and frustration of filing your taxes on your own comes down to being well organized and know what you are doing.
Definitely, many taxpayers are nervous about filing taxes on their own, especially when you are doing your own taxes for the first time. There are a number of considerations to keep in mind while learning how to do your own taxes because obviously, you don’t want to receive a letter from the Internal Revenue Service (IRS).
Before we go ahead with a discussion about doing your own taxes for the first time, let me tell you that is there always room for honest mistakes while filing your taxes. Even if you commit a mistake while filing your taxes (considering we’re humans), the IRS will gently ask you to send more money, provided they are convinced that the mistake was unintentional and in good faith. Everybody makes mistakes, and the IRS is not going to catch you by the neck for it.
Therefore, you can definitely learn how to do your own taxes, to save time and money in the long run. It may sound like a complex and challenging task. It maybe is, but once you do get a hold of things, there’ll be no stopping you.
Doing your own taxes is good for you!
It is always easier to hire a professional to file your taxes. However, you need to learn how to do your own taxes as it will make you a better consumer, keep you aware of your spending and expenses, and make you ready for negotiations. Filing your own taxes will also help you understand what you pay in tax and why.
Keep your tax paperwork in order
The first thing that you will need to do is to gather all of your necessary tax paperwork including your tax forms, A1040, W2’s, 1099’s (if you are self-employed), and any other important files. It is important to keep records of all of your finances, such as receipts and possible tax write-offs, during the year so it is easier to file your taxes and make sure everything is correct and up to date.
You should also educate yourself about what you can deduct from your taxes. If you are self-employed and have to travel for work, keep a log of how many miles you drive.
Using tax-prep software
Another important thing is finding the proper type of software to help you file your taxes. There are a lot of online tax filing websites that will lead you through the process step by step. You can also opt to buy software at a computer store. The software will ask you a series of questions to help you not miss any tax credits, bank account data reimbursements or deductions that you might qualify for. Some of these questions will include your average total income and some personal information. Tax software is also great because it allows you to file your taxes right in your own home. This means that you’ll be able to do it at your leisure and even file them early.
Be aware of the how-to instructions
Be sure to submit your completed tax form well before the April deadline to ensure that it arrives on time. If you file your taxes online, you can receive an email declaring that the IRS got it safely. If you mailed it, try to get a receipt for it so you can track your package.
If you are even slightly confused about how to go about the entire process while doing your own taxes for the first time, certain software products can help you. For additional assistance, you can refer to www.irs.gov. You can also get in touch with the IRS directly, in case of ambiguities.
Reducing your taxes
It is totally legal and acceptable to try minimizing the amount of taxes that you pay. It is legally allowed to make your own deductions, reductions, and adjustments to bring down your taxes. The IRS Tax Code 25.1.1.2.4 clearly explains the difference between avoidance and evasion of taxes.
You cannot misrepresent figures, but you can definitely make use of certain tax codes like the above to legally minimize taxes by legitimate means.
Final words:
Learning how to file your own taxes is a time-consuming task, but after you do it once it will get easier for you. you need to take your own time to get a hang of such things. Else, you can always consult a professional for guidance. However, filing your own taxes will help you save a lot of money in the long run.
