Taking a brief look into Tax Preparation Services
Tax preparation is a process from which every single earning individual and business organization have to go through. In simple words, it is a process of preparing tax returns. A taxpayer can choose to do the tax preparation by him or herself. They can also choose to do it with the help of a tax preparation software, online services or a private agency which specializes in this field. A licensed professional, such as an attorney, a certified public accountant (CPA), or a tax preparation service can all help an individual or an organization in this endeavor.
The national tax preparation laws of United States are very complicated therefore most taxpayers seek professional help for it. according to a survey by the federal government, more than 60% of taxpayers use paid services to complete and submit their tax returns.
Even if you hire someone else, there is still some work you must do. Following are the steps you must go through to effectively prepare tax returns, or help the tax preparer do it on your behalf;
Choose a Tax Preparer
Choosing a proper tax payer for yourself is the first step. You must pay attention to a number of things, such as if they have a good reputation in the market and what kind of feedback previous customers have given them. Make sure they have Preparer Tax Identification Number (PTIN). Avoid using a firm with exceptionally high fees and high standards if you can. You must also choose a Tax Preparation Service near you.
You can search an online tax preparation service IRS directory according to the credentials and location. As soon as you have chosen an appropriate preparer, schedule a meeting without delay. Otherwise you might miss the appointment as their schedule might be full later on.
Gather Your Documents
You should have received all the pertinent forms and documents by the end of January from your employer, banks, brokerage firms or other with whom you do business. Ensure that the information in each document matches your own records. Some common forms are;
I) Form W-2 for those who are employed on a job.
II) The various 1099 forms that report extra income you might receive.
III) Form 1098 to report any mortgage interest.
IV) Form W-2G to report any gambling winnings.
Collecting the Receipts
Gathering the receipts depend upon whether you wish to itemize your deductions or go through the standard route. You must choose whichever option given you a greater write-off. However, the only way to know for sure is to add your itemized deductions and compare them with standard deductions. You must look for the receipts to the expenses which are not covered or reimbursed by any insurance, such as medical expenses in contrast to a health plan. If they are substantial enough, it may be worth your time. If you have donated to a charity, that receipt must also be presented to see if you qualify for charitable deductions. If you have business income and expenses to report, you need to share your records with the tax preparer. The better organized records will take lesser time for the preparer to process which will lower the fees as well.
Provide your Personal Information
You must provide your tax preparer with your own Social Security Number, as well as the numbers of each dependent you claim. You must also provide the addresses and details of any properties you own or rent. If any property was bought or sold in the last fiscal year, all those details must also be provided with precise dates and amounts of transactions.
Requesting an Extension
If you feel like you need more time to complete all your tasks within the given time, you can request an extension to October 15. However, that does not mean you won’t have to calculate and pay an estimated amount by April 15 to avoid penalties. If you have overpaid, the amount can be refunded to you later.
What to do with a Refund
If you expect a tax refund, you can handle it in several ways;
I) You can apply some or all of the refund toward next year & taxes.
II) It can be sent back to you in a cheque or a deposit in your account.
III) You can contribute it to certain types of accounts such as, IRAs, Heath Savings, Education, Savings. You can also buy Savings Bonds.
Whether you do your own taxes or hire someone else to handle it, keeping good records will save your time and money. The earlier you start, smoother the process will go, and sooner you will have put the process behind you for another year. SG Inc. CPA is a Tax Return Preparation Service in Dallas, Texas. For over 15 years our employees have kept up with the constantly changing tax codes and times to keep our clients up to date with latest issues. We work hard to ensure maximum savings on part of our clients while making the tax returns timely and accurate. We put our knowledge, skills and experience on the line for our clients whether it be for their business or their family. We have your best interests at heart.