Tax time is either dreaded by those who haven’t kept proof of their earnings or rejoiced by those who have a record of all their spending and expect a tax rebate. Whether you expect to receive a rebate or not, saving money on tax preparation is always the goal. None of us wants to pay more than is necessary to have tax papers prepared and submitted to the IRS, therefore, many of us annually ponder money saving ways. Let’s take a look at some methods of keeping money in your pocket instead of in the pockets of the taxman or an expensive tax accountant.
First of all, it is important for you to understand the basics of the tax system. This doesn’t mean you should take a course in tax accounting or boring a professional with hundreds of inane questions, it simply means understanding your tax situation. For example; do you itemize, the number of deductions, the number of exemptions, your filing status, etc? If you are methodical person and do keep records, you will find it easier to compare prices for either the advice of a professional tax accountant or tax filing software. If your tax situation is not complicated, you will definitely save money by preparing your own return. The days of sitting for hours on end with a pencil and calculator trying to workout, the aforementioned, deductions and exemptions, are long gone. Nowadays with the advent of different types of software this tedious work is done for you. You also have the option of making use of the free electronic filing system which the IRS offers through a number of contracted companies. Using this method is convenient and although there are some income limitations, many find this process stress free.
Preparing your tax return is best done early – don’t leave it until the last minute. Ideally in the first couple of weeks of January is recommended. Preparing early gives you the time to make sure all the paperwork is correct; the last thing you want to do is annoy the IRS. In the event, you choose to use a tax accountant or some other professional, hiring their services early will allow to negotiate a discount. Again, if you wait until the tax season is in full swing, you’ll more than likely have to pay a higher rate. For people that have a complicated tax situation, don’t attempt to do your own paperwork, just to save a few bucks, unless you know exactly what you are doing. If you are not sure of the procedure, don’t get yourself in a tax quandary with the IRS; they can be unforgiving people – visiting a professional is advised. Should you hire a tax accountant or some other professional to handle your tax preparation, make sure you are organized; don’t give your accountant unneeded frustration searching for documents that you have lost, thrown out or just plain don’t have. These men and women, expect you to have all the necessary receipts, forms and other miscellaneous paperwork in order. This means don’t arrive at the accountant’s office with a couple of large boxes of documents, point and say, “My tax papers are somewhere in here”. Remember accountants and others, charge by the hour.
For the tax and computer savvy, the aforementioned tax preparation software, will certainly save you a great deal of money. There are various software applications able to be downloaded and used for, not only your tax preparation, but also for other financial planning. Once all forms have been filled-out, it is always a good idea to have a professional check the information prior to submitting the forms to the IRS. Tax accountants will not overly charge you for checking your efforts. There are also volunteer tax preparation specialists that are able to scan your documents and advise you on a variety of deductions and exemptions. Many senior citizens or low income families make use of this volunteer service. There are many people who have absolutely no idea or interest in the tax system and invariably visit an accounting firm. If you are one of these people, you can save money by saving time. This means, when you visit an accountant’s office make sure, as mentioned above, you are prepared. Only take paperwork that pertains to your tax return; do not take other documents that you want the accountant to review – he or she is a professional tax accountant, not your personal assistant. Should you visit an accountant with your spouse, don’t get into an argument over spending. There is not an accountant on the planet that wants to sit and listen to you and your other half fight about money. The longer you are sitting in his or her office the more money you’ll be charged. In short, as soon as an accountant welcomes you, the meter is running.
You will probably be asked, by the accountant, to fill out various forms, it is therefore, important not to make any silly spelling errors or any other misses that will, not only annoy your accountant, but also the bureaucrats at the IRS. There is one other point that you must remember when visiting a tax accountant and that is, do not expect him or her to “cheat” on your taxes for you. He or she will do everything legally possible to get you a rebate or a tax break, however a reputable accountant will not break the law – he or she won’t even bend it. The above money saving ideas are just a few of many others. The best way to save money on tax preparation is to use the following common sense methods.
1. Don’t attempt to prepare your own tax return unless your truly understand how to do it.
2. Do not waste value time in an accountant’s office – make sure you have all the necessary documents.
3. Take advantage of any volunteer service offered by the IRS.
4. Submit your tax return early – don’t wait for the last minute.
5. Make sure all your documentation is organized.
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