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Expert Advice: Tips for a Stress-Free Tax Season
Former C.P.A. Beverly Blair Harzog guides you through this intimidating annual process
Nervous about your taxes? Take a deep breath, and try to relax. Whether you’re preparing your own taxes or seeking help, here are some tips to keep you on the right side of the IRS.
If you’re doing your own taxes:
Use the right form. If you’re single or married filing jointly with no dependents, you can use Form 1040EZ as long as your total taxable income is less than $50,000. Otherwise you’ll need Form 1040. You can download both IRS forms irs.gov.
Get organized. Gather income statements, such as W-2s (1099s if you’re self-employed), investment information and any end-of-year statements you’ve received that contain tax information. You’ll also need paperwork related to tax credits or to your itemized deductions, such as mortgage interest.
Run the numbers. You can do your return by hand or use tax preparation software. TurboTax, at turbotax.intuit.com, (from around $45 for the deluxe version to about $75 for the premier version) was recently rated as the best tax software by USA Today. Other tax software options: taxact.com (it’s free), TaxCut at hrblock.com, completetax.com and IRS Free File Software at irs.gov (it’s free federal online filing, but you must make less than $56,000 a year to qualify).
File the easy way. Consider cutting out those long lines at the post office in favor of filing your return online. In 2007, 80 million people used e-file to file their returns. And 22.5 million of these came from home computers. The IRS has a list of software e-file partners that allow you to file your return electronically.
Now if the thought of doing your own taxes makes your eyes glaze over, you’re not alone. Sometimes it’s best to outsource, especially if your tax situation is complex or if you’ve won the lottery (in which case, you can afford to hire someone!).
If you’re using a tax preparer this year:
Choose wisely. The IRS has put together some helpful tips for choosing a tax preparer. Discuss fees before any work is done. If a tax preparer says that the fee is based on a percentage of your refund, find someone else!
Gather your tax information. Assemble your paperwork just as you would if you were doing the return yourself. The next step is easy: Hand your information to your tax preparer and relax!
Review your return. Read your return carefully before signing it. In the eyes of the IRS, you’re responsible for what’s on your tax return even if Uncle Bob filled out the forms.
About the author: Beverly Blair Harzog has an M.B.A. and is a former C.P.A. She’s written for Good Housekeeping, Bankrate.com, Better Homes and Gardens and Cooking Light and, she’s co-author of The Complete Idiot’s Guide to Person-to-Person Lending (Alpha Books/Penguin, April 2009).
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Thanks, Beverly. I'm going to link to this at Chaos Chronicles! Lots of listeners have taxes on their To Do List for the weekend. Lian