How much do you know about income taxes? As April 15th approaches each year in the America, most of us are at least thinking about filing our income taxes. It is important to have the tax information we need to complete our tax returns the right way.
Correct Tax Information Is Essential
A few of the more self-disciplined among us file early. Some of us who have complicated reporting put it off a little longer than we should. But none of us can avoid the responsibility.
It is important to realize that when it comes to income taxes there is nothing more important than what you know yourself.
Studies have shown that when you do your own tax filing you get the most accurate results. When you hire a tax professional to do it for you there will be more errors. And unfortunately, if you get help from the IRS there will be even more mistakes!
Personally my experience with the IRS hasn’t been all that bad, and in fact I have been helped significantly at times. Nevertheless, the important thing to know is that tax laws can affect you in dramatic fashion for better or worse.
Unless you know the rules that may affect your personal circumstances you may easily be paying a lot of taxes unnecessarily, perhaps costing you thousands of dollars. Obviously, then, it is important to personally get the tax information you need to complete your returns correctly.
How to Get the Information You Need
Fortunately, a lot of good information is available. A very good source, actually the best (authoritatively speaking), is available directly from the IRS. Check out http://www.irs.gov/ for a lot of well presented explanations of tax processes.
You can find all the information you need by going to the IRS site, but personally I like to use a few paid resources for completing my taxes. It is is primarily a matter of convenience and for saving time.
For many years I purchased the Ernst & Young Tax Guide. I found this guide to be extremely valuable. It is clearly written and easy to follow, but most important, I find it dealing consistently with the issues I really needed to know. This is the weakness of most of the popular guides. They tell you what is obvious and what you already know, but skip right over what you need!
For several years now I have used Turbo Tax to prepare my taxes. Personally I don’t like giving up the control you have in doing it all yourself, but it really speeds up the process by doing all the calculations and checking for problems, etc. Because they identify issues the IRS is likely to question and similar issues they provide information you might not be able to gain otherwise.
There are other advantages as well. For example, it calculates such things as depreciation (often a challenging task) and keeps records from year to year, importing them automatically for each new year. This saves a lot of time and complicated work.
Get the Tax Information You Need
One idea here is quite important. As you learn, think about how the rules apply to your future as much as to your immediate situation. Do not think only in terms of how to file current tax returns but also in terms of how to arrange your affairs for the future.
There are many requirements that demand either specific authorizations or record keeping that it is essential for you to implement now for your benefit next year. Remember, when it comes to your income taxes, having the correct tax information is the key to filing the most beneficial tax returns. Don’t be one of the many who pay way too much out of ignorance.
