Related Keywords: Tax preparation, Tax return preparation, Income tax preparation, Business tax preparation
Preparing for your taxes can be a frightening thought, especially if you're doing so for the first time. Determining what type of taxes you owe, whether it's a State Tax, Property Tax, etc, and then recording them appropriately is essential to avoiding a tax audit. Below is some simple advice to help those beginners survive their first tax filing.
1. Get a Headcount - You are 1 of 5 things in the eyes of the IRS: single, married filing separately, married filing jointly, head of household, or qualifying widow with a dependent child. So which are you? You're single if you're unmarried, divorced (or other separation contract) or (after a brief period) a widow. For those married couples that report their taxes on one return, you are 'Married filing jointly'. 'Married filing separately' allows married couples to file separately and reduce their amount of tax liability. A 'Head of Household' return is taxed at a lower rate. You must generally be single (some married couples living separately qualify) and be responsible for 1/2 of the expensives of a household where a qualifying depedent lives. 'Qualifying Widow' is for those who've lost their spouse in the past two tax years and have a dependent child.
2. Choose your Forms - All tax-paying citizens must fill out the basic tax form (1040, 1040EZ, 1040A). You will also need some additional forms. IRS Forms can be extremely difficult to understand, so it is important you have an understanding of the different types of forms so that you can print out and file all the ones you will need.
3. Choose your tax forms - W-2 forms, which you receive from your employer, are wage and tax statements . You should receive a W-2 from each of your employers at the beginning of each year for the income you earned in the previous year. If your employer does not give you a W-2 form by February 1, contact them immediately. In the end, it's your responsibility to report your earnings.
Should you have additional forms of income, the banks, mutual funds and other investment firms you've done business with will provide 1099 forms that show the dividends and interest you've earned over the course of the previous year. You would also get a 1099 if you worked as an independent contractor for any period of time. Once again, the responsible for reporting the earnings listed on all 1099's falls squarely on your shoulders!
4. Preparing Your Tax Return
Use the following checklist while gathering information and preparing your taxes:
* Collect all traceable records, including W-2s, 1099s, receipts, etc.
* Obtain forms and schedules from the public library or the IRS (you can download these forms online).
* Fill out your return...be sure to follow the directions carefully.
* Double check the return for errors.
* Sign and date the return!!!
* Attach any other required forms you might have.
* Make sure to include your payment voucher (Form 1040-V) along with any required payment.
5. Sending Your Tax Return
Make sure that your tax return is sent to the appropriate IRS processing center. Use the envelope provided by the Internal Revenue Service in the instructional booklet or make sure to find the appropriate address in the instructional booklets for the 1040, 1040A or 1040EZ forms. The appropriate IRS centers are listed by each state.