Prepare Your Own Income Tax Returns
So it’s that time of year again when you get all of your documents together and hurry down to the local income tax preparer with hopes of getting a big fat refund from Uncle Sam. There’s just one problem; according to WebCPA, the average cost of preparing an itemized 1040 with a Schedule A and a state tax return is $229. Is it really that difficult that we need to hire a professional to fill out a few forms? The answer is absolutely not.
I began preparing my own tax forms long before any software was created to help me do them. The only computer I had was a calculator and if I needed to make copies I had to drive to the library! In those days you had no choice but to mail the forms so your refund was partially in the hands of the U.S. Postal Service. No, I didn’t have any special training or college classes to teach me how to fill out the forms; I simply read the instructions and filled them out to the best of my ability.
The basic formula for the income tax form is simple; you list how much income you had during the year minus whatever deductions the IRS allows and the rest is taxed. This tax value is then compared with the amount of money you had your employer to withhold during the year and the difference is the amount you either receive or owe. Pretty simple, huh?
For most households it really is that simple and there lots of tools available to help you do it. You can prepare and file your income tax returns for free on the IRS website or if you prefer you can purchase a nifty software application that simply asks all the necessary questions and quietly fills out the returns in the background. When you’re finished, you can print a copy for your records and send the returns electronically to the IRS over the internet (called e-file). You can also elect to have the refund deposited into your bank account electronically which significantly decreases the amount of time it takes to receive your money.
You can purchase tax preparation software at nearly any of the large retail chains or the software manufacturer’s website and prices range anywhere from about $20 to $50. I began purchasing a brand of this software about 10 years ago and now they send the disk in the mail every year and I just activate it and pay for it online when I’m ready to prepare my forms. The software is designed to look for deductions so you don’t need to be a tax professional to use it. Most have a basic version and a deluxe package that will go even further to help find deductions and make your tax bill lower. You may also opt to consider FMD accounting service Singapore. This is more ideal if you own a business and having a hard time to hire an accountant because of the high cost of the hiring process. This kind of service can be cost efficient for your firm.
So what are you waiting for? Stop paying someone to prepare your forms and do it yourself. One warning – once you begin doing your own taxes your friends and relatives will be asking you to do theirs also!