Completing an income tax return is one of life’s miseries. Tax returns can be complicated and time consuming, and dealing with taxes is something that most people put off until the last moment.
But avoiding your tax return until you absolutely have to deal with it can result in missing or inaccurate information which lands you with a fine, so it’s in your best interests to knuckle down and get your tax return over and done with well before the filing deadline.
Whichever method you decide to use, your tax return will be easier to complete accurately if you have all of the required income and expense information ready before you or your accountant gets started.
Get Forms from the IRS and State Websites
You can go online to download and print the tax forms for federal and state taxes. Once you’ve filled in your information, mail in your forms along with your payment for any taxes that you owe.
You can also take advantage of the E-File service and complete your return online.
The IRS does provide information to help you fill out the forms, but unless your tax situation is very simple, you may prefer to choose another option.
Hire an Accountant
When your tax affairs are more complicated, hiring an accountant could save you a lot of time and money. Accountants are used to dealing with tax returns, and while filling in the forms will give you a headache, your accountant will breeze through the work and ensure accuracy.
A good accountant will also be fully aware of all of the exemptions you can claim and the loopholes you can exploit to lower your tax burden.
Plus, your accountant will have liability insurance, so if they do make a mistake which gets you into hot water with the tax authorities, you can claim compensation. If you do your taxes yourself and mess things up, you’re on your own.
Use Tax Software
Tax software occupies the middle ground between going it alone and using an accountant.
If you’re an employee or small business owner without foreign or investment income, then you could find that software solutions like Turbo Tax or TaxAct give you an easier way to complete your tax return.
The basic editions of these tools are free to use, but you may need to upgrade to a paid plan in certain situations.
Tax return software comes with extensive guidance built in to help you complete your return accurately, but if you enter incorrect information or claim deductions that you aren’t eligible for, you remain liable for the mistakes, and the cost of correcting your tax return and paying any penalties falls on your shoulders.
If you’re confident that you can complete your tax forms alone or with the help of tax preparation software, then you can avoid the costs associated with hiring an accountant. But if you have more complex financial affairs, or have doubts about your accuracy, then hiring an accountant will be well worth the money and will give you added peace of mind.