Preparing tax returns is an annual event that often results in considerable stress and anxiety for taxpayers. As a taxpayer, you may understandably want to ensure that your tax return is true and correct to the best of your ability as this will eliminate additional stress if your tax return is audited. You also need to maximize deductions to reduce the amount of income tax you have to pay to the IRS or other taxing authority. As you can see, you have a lot riding on the proper preparation of your tax return, but you may be looking for an easier way to prepare your tax return. There are a few options to consider that may take the stress and time commitment out of the tax preparation process.
Use Tax Software
One wonderful idea to consider is to use tax software. There are several options available to consider, and TurboTax may be among the most well-known of these solutions. Software programs such as these are updated annually so that they are current with the latest changes in the tax code. They also are designed to be user-friendly and will walk you through every stage of the preparation process. This helps to ensure that you do not overlook any deductions, sources of income and more that are important to the tax preparation process.
Hire an Accountant
Another thoughtful idea to consider is to hire an account. A tax accountant can easily prepare your tax return for you on an annual basis. You simply need to provide the accountant with all of your tax prep documents, such as your receipts, W-2s, 1099s and other forms. The accountant will review all of the information on your behalf and will expertly prepare your tax return. This is a great way to minimize the risk of an audit or of overlooking important tax deductions.
Track Your Expenses and Transactions
One of the most stressful aspects associated with preparing a tax return relates to finding all of the supporting documentation that needs to go into you tax return. For example, you may need documents about stock purchases and sales, IRA or 401k withdrawals, buying or selling real estate and your personal income from your job. Locating all of the documents that you need to prepare your tax return can take longer than it takes to actually prepare the return. With this in mind, you can keep track of your expenses and other transactions throughout the year rather than trying to piece everything back together when tax day rolls around.
Preparing your tax return is something that few people will rarely call easy to do, but you can simplify the process. With the right techniques and strategies, you can reduce your tax burden significantly and may be able to reduce the amount owed in some cases as well. Follow these simple tips to simplify your tax returns in the coming year.