5 Tips for Preparing to File Your Tax Return

So, tax season is here. Yipee! No, really, tax season is here – bring on the headaches. It’s probably safe to say that no one actually enjoys filing taxes. Even if you are expecting a considerable refund, it can be a real chore gathering all of the necessary paperwork and wracking your brain to document any and every deductible item you can think of. Fortunately, there are ways to make the process go a little more smoothly, and to ensure you get the most favorable results possible. Here are five tips for preparing to file your 2011 tax returns:

Scheduling time. Filing your tax returns is not a task to take lightly. It requires your undivided attention. Don’t attempt to prepare your taxes over dinner, while watching television, or in the office break room. Instead, pencil in a specific time to work on your taxes at home, when you know the house will be quiet and you can get your mind in full-on tax mode. That’s the only way to avoid unnecessary mistakes that could end up costing you a lot of money.

Recordkeeping. The best time to begin preparing to file your 2011 tax returns is in January of 2011. Ok, it’s obviously too late for that, but keep this in mind for 2012.  Make it a point to get into good recordkeeping habits, so that you have complete, accurate, and thorough records when it comes time to actually sit down and file your returns.

Organization. Create a filing system specifically for your tax return records. What should go in your filing system? Receipts for all of your write-offs, paperwork from income sources (W-2s or 1099s), investment account statements, social security statements, interest-earned bank statements, college financial aid statements, and/or anything else that you may need a record of when it comes time to shell out the backup.

Learn the codes. You don’t have to have a thorough knowledge of every tax code out there, but make it a point to bone-up on the latest tax codes that may affect your tax return status. If you are not all that tax-savvy, there are some simple, easy to understand tax code narratives on websites designed for people just like you.

Choose filing method. How complicated are your taxes? Are you comfortable doing them yourself? If so, there are some really great programs that you can use to do your own tax work. However, if you find that you aren’t sure about your tax preparation acumen, it’s best to hire a professional. Decide now how you want to handle this issue so you can start shopping around for the best software, tax preparation office, or accountant for you.

You don’t have to like filing your taxes, but you still have to file them. Ease some of your tax season frustrations by thinking ahead and following these simple tips.

About the Author: Carrol Petruska, NAC, NHA, CHA currently works in business administration and helps phlebotomy schools prepare for tax filing season. She started her career as a phlebotomist and then moved into the administrative side of the healthcare field. Visit http://www.associationphlebotomytraining.com/ for more information about phlebotomy associations and schools.

Why You Need to Hire Someone to Prepare Your Tax Return

The deadline for turning in your 2011 taxes is quickly approaching. Millions of Americans need to get their paperwork in order and file by April 15. Are you ready? Lots of people choose to do their taxes themselves, but others spend the money to hire a professional. While some people think that hiring someone to do their taxes is a costly, unnecessary expense, others wouldn’t trust such an important task to anyone but a professional. Hiring a tax professional is an excellent idea. No matter how simple your taxes are or how much you think you know, you need to hire someone to prepare your taxes. Here’s why.

You’ll Get the Best Result
Tax professionals such as accountants and agents are experts at what they do. They have years of training, education and experience, and they know the tax codes inside and out. You need that knowledge to get the best result for your return. Tax professionals will help you to get the maximum refund that you qualify for. They’ll help you identify deductions that you qualify that you may have otherwise been unaware of. When they take a look at your finances, they do so as an unbiased third party. They’ll be able to see opportunities to reduce your tax liability that you might overlook on your own. When it comes down to it, if you have your taxes prepared by a professional, you’re much more likely to get the highest refund possible for you.

You Don’t Have the Time
Preparing your taxes is a very time consuming task. If you have very complicated taxes, you can’t just sit down and get them done in a few hours. With work and family, you may not have the time to devote as much attention as necessary to your taxes. If you don’t have adequate time to spend, you won’t get them done right. You might make careless errors because you’re rushed. If you hire a professional, they’ll spend a lot more time with your finances because it’s their job to do it.

You Could Make a Mistake
If you do your own taxes, you could easily make a mistake that a professional wouldn’t. You might not thoroughly check your work and make a mathematical error, or you might have an incorrect understanding of something and not realize it. If you make a mistake on your taxes, it can cost you. It will take you a lot longer to receive your refund, and you could even be audited or accused of fraud. You need to hire a tax professional to protect you from yourself. In most cases, you’ll sign a contract with a tax professional in which they agree to represent you and stand by their work if the government decides to question you. This kind of reassurance is great to have.

The Bottom Line
The bottom line is that taxes are complicated, and they’re something you need to take seriously. For those reasons, it’s best to hire someone to help you. As long as the person you hire is educated, reliable, and has references that check out, you’ll be much better off, and you’ll have one less thing to worry about this Spring.

 

Lisa Haan has weighed the pros and cons and will be hiring a professional tax preparer this year. This will free up time for her to share more great money saving tips with help from the world’s best grammar checker.

Santorum Taxes A Tax Plan With Short Term Goals And No Long Term Benefits

Rick Santorum 2012 taxes and tax plan offers big savings for the wealthy and large corporations, while increasing the deficit. His plan substantially  cuts taxes, but the raise in the deficit counteracts any short term benefit to the American people.

The Santorum tax cuts would give the upper one percent the biggest tax cuts. Individuals who make between three-million to eight-million dollars would receive an average tax break of around one million dollars by 2015. The middle class who makes around fifty to seventy-thousand would receive around two-thousand dollars. The lower class making around twenty-thousand would get about thirty-nine dollars.

Santorum’s plan would increase the disparity between the haves and the have not’s. The burden on the middle class would increase and the upper class would continue to pay less taxes. Increasing the deficit would devalue the American dollar and lessen our spending power as a nation.

The Santorum tax plan would cut investment income and lessen the taxes of large corporations. The problem remains that corporations do not give back their profits with more jobs or increasing the growth of industries in the United States. Modern business looks at the profit margins and has no problem sending jobs abroad or having off shore bank accounts that cannot be taxed.

The Santorum plan only increases the economic problems, which exist today. The creation of more jobs, lessening unemployment, and lowering the deficit are not part of his plan. His plan is a bandage on a bleeding economic wound, with no constructive plan to keep the patient alive.

Budget Cuts Prevent The I.R.S. From Collection Of Taxes

Budget Cuts Make the I.R.S. Less Efficient, Report Claims

Reduced funding and an expanding mandate have left the Internal Revenue Service incapable of performing its primary duty of tax collection efficiently. This is according to a report released by the agency’s Internal Monitor on Wednesday.

The backlog of cases and job cuts has made the agency less capable of collecting hundreds of billions of dollars in taxes every year. This is what the national taxpayer advocate, Nina E. Olson claims in her annual report to Congress.

The agency is now using computer software to ask taxpayers to file their returns without necessarily going through the costly and time consuming audit. This has helped the agency to administer the ever-complex tax code.

She dismisses the claims made in the Internal Monitor report as baseless and inaccurate.

The report was released in the middle of a political showdown in Capitol Hill. The mandate of the I.R.S. is expected to expand in the coming years. This is because it is tasked with administering the healthcare plan proposed by Congressional Democrats and President Obama.

In the last financial year, the president asked for an increase of more than one billion dollars in I.R.S’s budget. This is to enable the agency to hire 5,100 employees.

While the proposed healthcare scheme is not yet in place, the operations of the agency have already been affected by the budget squeeze.

Due to the expanded mandate and job cuts, the IRS has not been able to respond to inquiries from the public. For instance, some taxpayers have to wait for up to six weeks to get a response to their inquiries.

While the report noted that IRS is already a well run agency, an increase in funds will increase its efficiency.

What’s New For Taxes

We have made it to our next tax season!  While your taxes are not due for several weeks still, this is the month that you will be receiving the documents you need to turn in: all of your W-2s, any 1099s you may have received for investments, and so on.  If you do not have a system in place to take care of your 2011 tax filing, now is the time.

Thanks to April 15 being on a weekend this year, taxes are not due until April 17 this year.  If you cannot get your taxes filed by that point, you also have the option of filing for an extension until Oct 15.  This is for filing, and not paying your taxes.

The IRS has made some adjustments to the way it requires people to file their income, particularly for capital gains taxes.  They have developed a new form, Form 8949, that you will use for these gains or loses.  This will be especially useful if you are reporting sales of stocks.

There has been a payroll tax on the books for the past couple years, and Congress has extended it to February 29, meaning you will be paying 2% less on social security wages through February at the least.  If you make more than $110,000 per year, you will not need to pay social security.

Another major change is that a health insurance deduction for self-employed workers no longer offsets the self-employment tax.  If you pay these premiums you can still deduct them from your 1040 however.

Finally, the Making Work Pay tax credit is no longer offered.  For the past couple years many Americans got a $400 credit for working traditional daytime jobs.  This has expired and there are no plans to renew it in the future.  These changes have not drastically changed 2011 tax filing, but they are new for 2012 and are something to make note of.