Most of us have questions and concerns about our taxes, and when tax time rolls around many of us start to worry about organizing and filing tax returns. The thought of making a mistake, filing late, or owing much more than you thought can be a worry. Luckily, there are a few easy tips that can make tax time much easier to cope with. You can save both time and money by using these tips to prepare and file your taxes on time.
Organizing your Tax Records
The most important thing-the number one tip for preparing taxes-is to get organized. Good organization saves you time and effort, and it can save you money, too. This is something you can do throughout the year, by saving receipts and records that you’ll need at tax time. Remembering to do this all year can be difficult at first, but it gets easier with time.
Here are some more tips to make tax time easier:
Organize your receipts, old tax records, and other relevant papers in a box or filing cabinet to make sure you don’t lose anything you may need later.
Keep your checking account organized by writing down dates and check numbers in your check registry.
Make sure all of your records are kept in a safe location. Mark the box you keep records in clearly so they’re not accidentally thrown away, or buy a filing kit to help you stay organized and to keep your records in one place.
Keep your records current by filing in a separate box or file for each year.
Here are some tips you may find useful if you plan to claim business deductions. Keeping these kinds of logs and records can make filing business taxes much easier. If, on the other hand, you have an accountant or tax agent for your business, they’ll definitely be appreciative if you keep good records. Another advantage of keeping these records is that you’ll have time to investigate any problems that arise long before the tax deadline.
Keep separate records for business and personal taxes if you own your own business.
Keep separate credit cards for business and personal use, and make sure the accounts stay separate.
Keep a transaction log for deductions, auto mileage, and other business-related expenses.
Tips for Filing Taxes
When tax time arrives, knowing the best way of filing is just as important as all the records you’ve kept over the year. You have several options for filing your taxes.
Using your own knowledge to file paper taxes (filling out paper forms and mailing them off, the old-fashioned way).
Filing online at the IRS web site
Using Turbo Tax online. If your tax return is very simple you may qualify to use it free, otherwise it’ll cost between $50 and $100 to use the web site. You can also opt to pay extra to have an online tax professional prepare your taxes.
Working with a tax preparation service (such as Jackson Hewitt or H&R Block).
Working with a tax attorney or accountant.
Regardless of the method you choose, make sure you always back up your work, especially if you use tax preparation software. Make copies of receipts and other documents, and consider keeping scanned copies online in an electronic storage file.