When tax time rolls around, people tend to fall into two categories: people who want to file their income tax return immediately and be done, and people who want to put it off as long as possible. People who file early are generally better prepared and have more time to resolve issues, while people who procrastinate are more likely to run into trouble or need tax help. Whether you're in the first or the second category, consider these income tax tips to make the tax season smooth sailing:
Know when to do it yourself, and when to hire tax help
If you've got a single W-2, no assets and you don't itemize deductions, your taxes probably aren't too complicated to do yourself. With a few basic income tax tips, you can file your own taxes whenever you're ready. However, if you're an independent contractor or a small business owner, if you've got multiple W-2s in multiple states, or if you itemize your deductions, you may need tax help. Hiring tax help can save you hundreds or thousands of dollars; you might find deductions you didn't know you could take, or you could find out about a potentially expensive fine or penalty and avoid it through proper filing. Don't gamble with your taxes: the most valuable income tax tips for people with complicated finances all include hiring tax help.
Use income tax filing software
If you're determined to prepare your taxes yourself and don't want to hire tax help, use income tax filing software such as Turbo Tax or TaxCut. These software programs walk you through filing your income taxes step by step, including income tax tips to make sure you're maximizing your deductions and paying all your necessary taxes. With tax code that changes every year, it can be difficult for individuals to navigate the tax maze; using tax filing software gives you tax help without the price you'd pay to hire an accountant. If you're going to take any income tax tips, take this one: if you don't want to hire a professional to prepare your taxes, use tax preparation software.
Prepare your documentation
The most time-consuming aspect of preparing income taxes is gathering and compiling all the required documentation. If you're using professional tax help to file your income taxes, you'll need to provide all your relevant documents to the professional. If you're filing yourself, even the best income tax tips won't help you unless you have the documentation to back up your income, expenses and deductions.
Check your local library
Libraries are great sources of income tax tips and forms. Most libraries set up a tax filing center in the beginning of the year, including forms and publications from the IRS with changes to taxes and other income tax tips. If you're the determined do-it-yourselfer and you don't want tax preparation software, make your local library your one-stop tax filing spot.
 | While we all need to pay our taxes, you shouldn't pay more than you actually owe. Understanding a few basic income tax tips can greatly lower your tax liability. You can claim a number of tax deductions in order to lower the actual amount of tax you pay. However, you should be aware of issues such as raises and the alternative minimum tax (AMT), which may alter your income tax analysis. |
 | Are you worried about penalties for late tax returns? For whatever reason, you've let the April 15th income tax deadline come and go. There are penalties for late returns, but, if you follow the appropriate steps, you can minimize the penalties and keep things in good order with the IRS. |
Nearly 75 percent of Americans receive a tax return each year, with each return averaging nearly $2,500. That's a nice windfall for most of us but that doesn't mean you should run out and spend it like it's burning a hole in your pocket. |
Use our checklist as a guide to help you gather necessary forms and receipts for preparing your income tax return. |
Paying income tax on tips is easy when you work for wages and your employer is in charge of extracting the amount from your paycheck. When your work includes tips, things become a little murky. You are the one responsible for reporting the proper amount on your income tax information and paying the right amount of tax on tips. |
