ENTREPRENEURSHIP / OCT. 10, 2014
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How to Simplify Filing Your Taxes

Filing taxes can give you a major headache at the start of the year. January and February is when you receive the dreaded W-2 Form from your place of work and when you have to start filling out those 1099 Forms. It’s a time for great peril, but you can reduce the complexity of the system. You can simplify filing your taxes. Follow these clever tips to find out more.

  1.       Get Organised

Organisation is the key to success. You need to make sure you have all your financial statements organised in your place of work/home far in advance. This will make it easier to find and file what you need to. Too many people leave filing their taxes until the last minute. It isn’t something you can do over a short period of time.

Ideally, you’ll have a system in place for storing various receipts and invoices at the start of the financial year. If not, make sure you come up with one as soon as you can.

 

  1.       Deciding on the Right Way to File

It’s your turn to decide how you want to file your taxes. You can use tax software, paper, or just get an accountant to do the job for you. If you do decide to find someone to do it for you, make sure you do your research first. Inexperienced filers often fall victim to con artists who try to charge based on how much of a refund they can get you. What they often don’t tell you is it won’t be legal, and you can guess who will take the flak if you get caught.

If you’re worried about paying too much, consider the Free File programme. This partnership between 20 software companies and the IRS is available for taxpayers who earn less than a certain amount; it’s currently about $58,000.

 

  1.       Avoid Procrastination

Procrastination is the worst possible affliction. If you start to procrastinate when the time comes to do your taxes, the time will slip away and you’ll find yourself frantically trying to get it done by the deadline. You need to give yourself time, but you also to avoid taking too much time. The key to simplifying your taxes is to never put yourself under pressure.


At the same time, don’t be in such a hurry to get it over and done with. Some taxpayers prefer to complete it in a few hours and never think about it again. This is how people make silly mistakes. And mistakes can get you audited.

If you need more time, file Form 4868. This gives you an additional six months to file your paperwork.

 

  1.       Ask for Help

Never be afraid to ask for help from someone who knows more than you about filing taxes. A lot of inexperienced taxpayers complicate their problems by attempting to barrel on regardless of what’s going on. If they asked for help earlier, they would have no problems.

The IRS is there to help you. Contrary to what a lot of people think, they just want to help you pay your taxes. If you work with them early enough, they’re more likely to give you a wide berth and focus on giving you a hand.

You can also call in the help of a tax professional to assess your finances. They will aid you for a small fee in gathering together all the required documentation and ensuring that you have the correct forms. As already mentioned above, though, you need to conduct due diligence when finding the right tax professional for you.

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