Are you preparing for doing your taxes?
As a small business owner, you are used to dealing with all sorts of paperwork. But when it comes time to file your taxes, the process can be full of confusing jargon and complicated forms.
While the IRS has done its best to make tax filing easier for businesses with software like TurboTax Business and free online filing options, there is still a lot that can go wrong if you’re not careful.
But don’t worry. Keep reading as we’ve compiled five tax-filing tips that will help you avoid common mistakes and ensure smooth sailing come tax season!
What are the Advantages of Filing Your Own Tax Return?
Taxpayers have several advantages when filing their own taxes. First, if you’re self-employed or running a business out of your home, filing yourself is generally faster than having an accountant prepare your return for you. Second, many people find the whole process very satisfying—you’ve earned that refund check after all!
And finally, it’s usually much cheaper to file yourself than to hire an accountant.
What are the Disadvantages of Filing Your Own Tax Return?
There are a few potential disadvantages to filing your own taxes. The first is that it can be more difficult than you think, especially if you’re not familiar with the tax code. Second, if you make a mistake on your return, you may have to pay a penalty. And finally, if you’re entitled to a refund, it might take longer to receive it than if you had hired an accountant.
Although it can be tricky, here are some tax filing tips to make it a breeze for you:
1) File Electronically
Why should I file electronically? Filing electronically will save you money because there is usually an associated with printing and mailing in your return. It will also save you time because the IRS will usually process your return in less than 21 days.
The IRS offers a free electronic filing service called Free File. This service is available to taxpayers who have an adjusted gross income of $62,000 or less.
2) Request a Tax Extension
If you can’t file your taxes by the deadline, don’t panic! You can request a tax extension to give yourself more time to file. This will buy you an extra six months to get your paperwork together and file your return. However, keep in mind that any taxes you owe will still need to be paid by the original deadline. In addition, a tax extension does not give you more time to pay your taxes.
3) Report Your Income Correctly
One of the most important things you can do when filing your taxes is reported your income correctly. This means making sure that all of the income you earned during the year is included in your return. If you don’t report all of your income, you could end up with a bigger tax bill and potential penalties and interest from the IRS.
If you received a W-2 from a work employer, then there is nothing to worry about. However, if you are self-employed or have other types of income, make sure to report it all.
4) Take Advantage of Tax Deductions
There are a number of tax deductions that you may be able to take advantage of when filing your taxes. This includes deductions for things like student loan interest, mortgage interest, and donations to charity. Be sure to check out the full list of available deductions so that you can claim the ones that apply to you.
Tax deductions are one of the best ways to reduce your tax bills. Deductions are amounts that you can subtract from your taxable income, which reduces the amount of taxes you owe. There are a number of different deductions available, so be sure to check out the full list and see which ones apply to you.
5) Use Free Tax Preparation Services
If you don’t feel comfortable preparing your own tax return, don’t worry! There are many free tax preparation services available that can help you get your taxes done quickly and easily. These services can be especially helpful for low-income individuals and families who don’t have the means to hire a professional tax preparer.
Some of these services are offered through the IRS itself, while others are offered through private companies. Whichever service you choose, be sure to do your research beforehand so that you can be sure you’re getting the best deal.
Why Should You Hire A Professional?
While there are many free tax preparation services available, sometimes it is a good idea to hire a professional tax preparer. This can be especially helpful for people who have a more complicated tax situation. A good tax preparer can help you make sure that you are taking advantage of all the deductions and credits available to you, which can save you a lot of money on your taxes.
Plus, if you ever get audited by the IRS, having a professional on your side can be extremely helpful. A good tax preparer will be able to answer any questions the IRS may have and will help to make the process as smooth as possible.
So, whether you are filing your taxes yourself or hiring a professional, be sure to know about these five important tips!
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Want More Tax-filing Tips?
We hope that these tax-filing tips have helped you get a better understanding of how to file your taxes. The IRS can be difficult and confusing, but it doesn’t need to be. If you are looking for more help on how to do your taxes, please visit our blog for more tax planning tips!
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