Friday, December 9

How to Prepare Your Taxes in 10 Simple Steps 

 

 It’s that time of year again! Time to gather up all your W-2s and 1099s and get ready to file your taxes. For some people, tax time is a breeze. But for others, it’s a confusing and daunting process. If you’re in the latter camp, don’t worry—we’re here to help. In this blog post, we’ll walk you through the 10 simple steps needed to income tax preparation. By the time you’re done reading, you’ll be an old pro at this!

 

 

  1. Gather up all your documentation. This includes your W-2 forms from your employer, any 1099 forms from banks or other financial institutions, receipts for deductible expenses, and anything else related to your income and expenses for the year. Get it all together in one place so you can easily reference it as needed.

 

  1. Choose the right filing status. There are five different filing statuses you can choose from when filing your taxes: single, married filing jointly, married filing separately, head of household, or Qualifying Widow(er) with Dependent Child. Be sure to choose the one that applies to your specific situation. 

 

  1. Determine if you need to file a return. The answer to this question depends on several factors, including your filing status, age, gross income, and whether or not you’re legally required to file a return (for example, if you’re self-employed). You can use the IRS’s “Do I Need To File?” tool to help you figure out if you need to file a return or not. 

 

  1. Calculate your taxable income. This is simply your total income for the year minus any adjustments (deductions) that apply to you. Adjusted gross income (AGI) is what’s used to determine how much tax you owe for the year—the higher your AGI, the more tax you’ll owe. 
  2. Figure out which deductions and credits apply to you . This step will help lower your taxable income (and thus also lower the amount of tax you owe). Some common deductions include those for charitable donations, home office expenses, medical expenses, and student loan interest paid . There are also many credits available , such as the child tax credit , earned income credit , adoption credit , and education credits . 

 

  1. Choose whether to itemise or take the standard deduction . Itemising involves itemising each deduction on Schedule A of Form 1040 , while taking the standard deduction simply means claiming a set deduction amount based on your filing status . If your itemized deductions are less than the standard deduction amount , then it makes sense to just take the standard deduction rather than itemising . 

 

  1. determine how much tax you owe . This calculation will be based on several factors , including your taxable income , filing status , number of dependents , and whether or not you made any estimated tax payments during the year . 

 

  1. estimate any taxes owed . If it looks like you’ll owe taxes when you file your return , it’s a good idea to make an estimated tax payment ahead of time . This way , you can avoid being charged interest and penalties on any unpaid taxes . 

 

9. file electronically . Filing electronically is the quickest and easiest way to file your taxes—plus , it usually results in a faster refund ! You can e-file using IRS Direct Pay or an approved e-file provider such as TurboTax or H&R Block . Simply follow instructions on how to complete Form 1040 using one of these methods . 

 

10. review everything before sending . Once you’ve completed Form 1040 and are ready to submit it , take some time to review everything carefully first . Make sure all information is accurate and complete — mistakes could delay processing of your return or even result in an audit ! Once everything looks good , hit “submit” — and that’s it ! You’re done !See ? Filing your taxes doesn’t have to be complicated or stressful ! Just follow these 10 simple steps and you’ll be done before you know it !

If You have any questions along the way or need additional help preparing taxes , don’t hesitate to reach outta professional tax preparer — they’ll be happy to assist you!