Most of us consider doing taxes a necessary evil. It has to be done, but it's confusing and complicated, as well as time-consuming, and it's just easier to hand everything over to an accountant or tax preparer. But thanks to improved tax preparation software and the ease of filing online, it's become much easier and more convenient to prepare your own taxes.
Before You Begin
While your accountant may not like being handed a shopping bag full of jumbled receipts and pay stubs, it's his job to sort through it. But if you're doing your own taxes, it's all up to you. Start by setting up an organized filing system and use it throughout the year. Set up files for each month, and as you get receipts for deductible expenses, put them in the file right away. This will save you the trouble of sifting through a mountain of receipts at tax time. Once you're organized, you should determine what method of filing to use. You could purchase tax preparation software such as TurboTax. Many of these programs can receive your W-2 information electronically from your employer, as well as link directly to your online bank accounts and financial software, saving you considerable time in inputting information. However, due to constantly changing tax codes, you'll need to update your software every year. E-filing is another possible alternative. There are many online companies that will help you prepare your return and file it electronically. If you choose this option, you can receive your refund by direct deposit, often in less than two weeks. If you owe anything, you can have your payment taken directly out of your bank account. E-filing is free for many taxpayers, and cheaper than the other methods for the rest. You can find a list of vendors at Irs.gov.
Once you start the return, you'll be asked a series of questions about your family, employment, living situation and several other topics. Pay attention to these questions and think about your answers, as they will be used to help determine possible deductions and credits to lower your tax bill or increase your refund. Be careful when inputting numbers. While the system will do the math for you, it can only work with the information you give it. Copy numbers accurately from your W-2s and other forms to avoid unpleasant surprises.
Always Double Check
Once you've finished the return, print a copy and go over it line by line. While it's unlikely you'll find any arithmetic errors, this gives you a chance to confirm that you entered information correctly. It also gives you a chance to spot anything you may have missed. You might have misunderstood a question, or answered it incorrectly. Reviewing your return allows you to correct these errors before filing, potentially saving you money or headaches with the IRS. However you choose to prepare them, doing your own taxes will work well for most people. However, if you have a particularly complicated return or require sophisticated tax planning, you'll probably want to seek the advice of a professional.
- Creatas/Creatas/Getty Images