Taking On Your Own Taxes Without Getting In Trouble With The Tax Man

Tax time is a stressful period for everyone, and many people hire professionals to help them get through the process. While professionals are beneficial to many, there are instances where going it alone is the smartest way to handle your tax time dilemmas. Most individuals filing a simple 1040 can take this route, and doing it without causing red flags with the IRS is certainly possible with a little advance planning and organization. This article will provide you with some vital steps you must follow if you plan to file your own taxes at the end of the year.

When it comes to filing your taxes and making sure all of your deductions are accurate, it is important to keep a daily log of all expenditures. This can include personal expenditures such as medical debt or child care needs, and it can also include business expenses such as travel, Internet costs or home phone line costs. The important thing is to make sure you accurately document when the expense took place, how much it was and what the purpose of that expense was. A simple way to do this is to keep a ledger book with you at all times, and write everything down as it happens.

In addition to writing things down, it is important to keep receipts and copies of bills whenever possible. Should you face an audit, an IRS representative will want you to back up your written down expense with proof that it actually happened. Having a hotel receipt, copy of a phone bill or invoice from a client with certain expenses you were responsible for noted on it can help. Keep these organized in a filing cabinet or scanned onto your computer so that you can easily locate them if necessary.

Also going along with writing things down and keeping receipts comes remaining organized. There are a number of different systems you can use to track your expenditures and income, so choose one that works for you and stick to it. Having a system of organization in place will help you to find information quickly when you are completing your taxes, and you can resort to that income to accurately input your income, losses, gains and expenditures. This will make it easier to both complete your tax forms and deal with the IRS in the unlikely event of an audit.

Finally, make sure to meet your tax deadline. Filing late can cost you extra money in penalties and fees, so always make sure to complete your filing on time. Mark a date on your calendar at least a few weeks ahead of your tax deadline, and use that date as your start date for your tax filing project. Doing this will keep that last minute stress away, and it will help you to make sure your taxes are in the mail in enough time to please the tax man.

Filing your own taxes can be a great way to save money come tax time. Just make sure to keep track of everything throughout the year and stay organized too. By doing this, you can get that 1040 completed without the help of a tax professional, allowing you to feel a sense of accomplishment about your personal financial situation.