Tax Returns: Getting Started
How do I get started doing my taxes?
The first thing to do is to gather the information together. What information do I gather together, you ask? What I'm going to gather together is what I'm going to need to prepare my tax return. I need to know my income, from whatever source it may be. I need to know the expenses that I've incurred in earning that income. Some of them may not be deductible, and you may not know that until you sit down with the tax preparer or you sit down in front of your own computer or in front of the forms and still filling it out. But you want to gather everything together and have all the records in front of you before you pick up that pencil and start working.
Where can I find tax forms?
Besides going to Internal Revenue Service to get forms, every state taxing agency has a website. You can go on there and download the forms from their website, which will also tell you how to deal with it. There's also books available from the IRS. There's a Publication 17 that the IRS offers, which is a simple manual on how to do your tax forms. It covers everything from A to Z.
Where can I find great tax reference materials?
If you're looking for tax reference material - "Now I'm ready to get started but I have no idea what I'm going to do" - and you want to try to do it yourself, there is tax reference material. The IRS puts out Publication 17, which is a simple book written in English to explain taxes and lead you through all aspects of tax. Most of the state agencies have forms and instructions. The instructions with the forms themselves will help you.
Can I get help with my taxes from the IRS?
There is a toll free number you can call 8-829-14. You can call that number and ask the question of the IRS. Bear in mind that you're talking to the IRS. If it's a complex question, you may get three answers for three different people. If it's a simple question of how do I file a form, where do I get the form, what do I do? They are very good and they are helpful, but bear in mind you're talking to the IRS.
Should I use tax preparation software?
If you want to do your taxes on your own and you are looking to get on your computer and do the tax return, there's a number of tax preparation software programs out there. Probably one of the biggest ones that you see is TurboTax. TurboTax is owned by Intuit. It's a major company. They try to do a good job and be aware that using a tax preparation software doesn't necessarily answer all of the questions. It leads you through preparing your tax return. Answer the questions. Fill in the blanks. But there's going to be some times where answering a question depends on the interpretation of the tax law. If you interpret it the wrong way, you may come up with the wrong answer. Be aware using your own tax preparation software that you really need to have a little bit of knowledge about taxes and if you are unsure, best to back up, look at the instructions and try to understand what the question is asking before you just blindly put it in and figure the computer knows what it is doing and let it go.
What are the advantages of filing electronically?
Filing electronically means that you whether you use your own tax preparation software or you are working with a professional who will file the return electronically, the processing of the tax return internally will be sped up. Filing electronically transmits the data from your computer or the preparer's computer directly to the IRS. It will cut the processing time down. It saves paper, it saves postage and that's the way to really go if you can.
How can I file my taxes electronically?
If you're using tax preparation software like Turbo Tax, they have an e-file programme built in to it. The thing that you're dealing with is that the Turbo Tax programme will e-file your tax returns electronically with the IRS. You may have to get an additional program or contact your state taxing agency if you want to try to e-file with the various states that you're in. If you're unsure about e-filing yourself, there are some tax professionals to whom you can bring the tax return, and for a small fee they will process the return and process it electronically for you.
How many taxpayers get audited?
Well, I guess the biggest fear that they have with the IRS is being audited. The percentage of tax returns that are audited in the United States is relatively small. I think it's down probably below 2% now. It doesn't mean you're not going to get audited but as long as you've done your job right and maintained records, you won't have a problem getting through the audit.
What should I do if I'm missing receipts?
If you're missing some receipts and you can't figure out how much you spent for a particular item, use your best guess effort. But bear in mind that at some point in time, the IRS might ask you to substantiate what you put on your tax return and if you're missing receipts, you might have a problem when that time comes.
