Introduction to Tax Preparation
If every there was a subject that people do not enjoy, it is preparing taxes. With this introduction to tax preparation, you will now be able to do it with the least amount of pain.
Introduction to Tax Preparation
The old cliché is that the only two things certain in life are death and taxes. Unfortunately, this is true. While death is a grim subject, most people know they need to prepare for it by getting a will or trust and buying life insurance. The key thing to not is that they are preparing for the event before time. Of course, it is a bit difficult to do afterwards, but I think you get my drift. With this introduction to tax preparation, you will note a similar theme.
To make your tax preparation effort less painful, you must properly prepare for it. Nothing slows down the process and creates more frustration than finding out your don’t have a particular form or have to stop what you are doing to go hunt down a receipt. It kills your momentum and drives you nuts.
To make life less miserable, organize all of your records before you even think about looking at a tax return form. Once this is done, get whatever version of the 1040 form you are using. Read through it to make sure you have all the relevant other forms you will need. Do not start your taxes till you have them. Importantly, some forms cannot be printed off the computer as the IRS requires a particular form that can be read by its computers. If you need such forms, you can almost always get them at the closest major post office or public library. Call ahead so you don’t waste time driving around.
Once you have everything together, there are two approaches to preparing your taxes on your own. The first is to just hammer you way through the entire process at once. The advantage to this approach is you deal with everything in one session. The disadvantage is you can get easily frustrated with the complexities of IRS instructions that were apparently written by a drunken sailor in pig latin. Such frustration can easily lead to you making mistakes, so be very careful with this approach.
If you are even remotely disciplined, a better approach is to prepare your taxes in steps over a few weeks. The first step is to get all of your raw numbers together such as gross income, total mortgage interest deduction and such. Once completed, you can come back to the tax form in a few days and fill it out. Now wait another few days and go back to review the return for errors. The advantage to this approach is it is less stressful and you are far less likely to make mistakes. The downside is it occurs over a number of days.
Whatever approach you decide to take, this introduction to tax preparation should make it clear you need to prepare your records, forms and self before starting. Trust me, it will go much better this way.