How to Do Your Own Taxes Without Costly, Professional Help

“IT DOES NOT HAVE TO BE EXPENSIVE”

by Contributor

(Mar. 30, 2020) — Want to learn how to do your own taxes without the help of an expensive accountant? Check out this guide for more…

Did you know that the US government gathered over $1.7 trillion in tax in the 2018/2019 fiscal year?

This was a record and indicates how well the economy was progressing at the time.

However, realistically, economies are subject to booms and slumps. If you are looking to save money for your business to protect it in difficult times, what can you do? Did you know that learning how to do your own taxes can save you both money and time?

Why not take a look at our in-depth guide below to see how it can save you some valuable dollars.

Why You Need to File a Tax Return

If you want to save money by submitting your own tax return, you fırst need to know why we submit them. Even though your employer has a record of your gross and net earnings, this does not tell the whole story. There may be reasons why you should pay more or less tax.

Filling out a tax return gives you, the taxpayer, the opportunity to provide a fuller picture and pay a more accurate amount of money. It also provides an opportunity to provide information that could later lead to a tax refund.

In any case, the tax return is due most years on or near April 15.

How to File a Tax Return

Traditionally there are three ways to file a tax return.

The method you choose will depend on your budget and personal choice.

The Manual Method

The manual method includes getting a Form 1040 and following the instruction to complete it. You then simply mail the form to the IRS and include any necessary payments.

Tax Software

Tax software will assist you in filling out your 1040 but in a more user-friendly manner.

It will walk you through the process and ask a series of questions about your income and personal circumstances. In many cases, it will give you the option to file your taxes electronically at the end of the process.

Hire a Professional

The most expensive option is you can always hire an account or tax preparer.

This individual will work with you to work out the most beneficial deal. They will leverage their experience and knowledge of the sector to gain the maximum savings for you.

How to Calculate How Much to Pay

To calculate the tax you will need to pay, you will need accurate figures regarding your income for the previous year. If you are employed, your employer will give you a form called a W-2.

This form will indicate how much you have been paid and how much the state has already deducted. Other things will affect your tax burden but this is the main method for determining how much you will pay.

Self-employed workers use forms called 1099s; these are the official records of your earnings. However, in some professions, it can be difficult to prove your earnings.

In this case, you can take advantage of a paystub generator. This type of company will assist you in obtaining paystubs that can be used to prove your income as a self-employed person.

The federal government employs a progressive tax system. This means that as your income increases you will enter different tax brackets.

How to Reduce Your Taxes

When calculating the amount of tax you will pay, it is very important to understand tax-deductible items.

Itemized deductions can reduce your overall tax bill the following year.

Tax deductions could be anything from charitable donations, tax relief for rebuilding businesses affected by a natural disaster, and more. These are not directly deducted from your tax bill; they are deducted from your income for that year. This may then impact your tax bracket and the tax you will subsequently pay.

Getting Your Tax Refund

After you have entered your income figures, deductions, and credits, you will see the balance. Either you will have a tax bill or the government will owe you a refund.

In the case that you owe money, you will send it through an accepted channel to the IRS or Department of Revenue with your tax return. If you have had a shock and the amount is more than you can pay at this time, don’t worry, as they will provide payment options. Staggered payment installations are an option for those who cannot pay in one lump sum.

If you are due a refund, you can inform the government of ways for the money to reach you. Often they will send a mailed check or make an electronic payment directly into your bank account.

One last important point. You should keep your completed and sent tax returns in a safe place. You will need it for preparing your tax return next year. Also, if you are unfortunate enough to be audited you will need to have your tax returns in a handy place.

How to Do Your Own Taxes and Much More

The expression, “There is nothing certain except death and taxes,” shows that we cannot avoid the inevitable. We all have responsibilities toward the state regardless of our form of employment. However, it does not have to be expensive.

Learning how to do your own taxes can save you money. You may not have to hire expensive assistance and you will learn business practices that can teach you how to lower your tax burden.

If you would like to know more about business and lifestyle trends, we are here to help. We research and publish trustworthy information regarding the latest developments. Follow our feed to find out how we can help you today.

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