Tax Preparation Software Tips

Executive Summary About Tax Preparation Software Tips By Allison Merlino

Tax Preparer

Tax preparation software has become increasingly popular over the past few years. As a result paid preparers are becoming more expensive which in turn increases the number of people in search of tax preparation software! Anyone in need of a perfect Catch 22 scenario can feel free to quote my last sentence!

Those hesitant to use the software often fear making mistakes. A mistake in the governments favor can cost you monetarily. A mistake in your own favor can cause an audit and in turn cost you monetarily. I offer the following guidelines as a safe approach to your tax management.

Tax professionals are in the zone. Asking the right questions is key. As a general rule I would (and do) sit with a tax professional in any year that there is a significant change. These changes include a dramatic increase or decrease in income, a marriage, a birth or an adoption of a child (especially adoption, due to associated costs being deductible), a change in a business loss or gain status, the selling or buying of a home, etc.

Once your situation plateaus tax preparation software is a less expensive alternative. I strongly suggest getting a second opinion (a little more work). Run your numbers through one of the online tax prep services that require payment only when filing.

This “second opinion” will give you peace of mind that your return has been prepared correctly. The following website compares multiple features and prices of 10 different tax software products: http://tax-software-review.toptenreviews.com/.

If you find that you have been using tax preparation software for a number of years, you might want to visit a paid preparer and ask them to take a quick look at a couple of previous year filings as well as prepare the current year’s filing. The preparation of the current year’s filing will get you in the door.

Tax preparers tend to be anxious to find others mistakes, even if that “other” is an automated software company! If a mistake is found you can choose to have the preparer amend prior year returns or do so yourself as most software products have this option.

Even in the years that I have chosen to use a paid tax preparer, I run my simple numbers through an online software program just to get a ballpark figure.

Tax preparation software is a less expensive alternative that I suggest using in combination with the professional services of a paid tax preparer. The guidelines above will help you reduce error and give you peace of mind while greatly reducing your cumulative tax preparation costs.

How to Prepare Early for the Upcoming Tax Season

Executive Summary About  How to Prepare Early for the Upcoming Tax Season By Roni Deutch

Organized Filing System
Having a well-organized and thorough filing system makes all the difference. Using an accounting program like Quicken will help out a lot, but as long as you can keep a small filing box or cabinet for important documents you can avoid having to search for them in April.

Keep Only Important Documents
As opposed to saving every single bank statement and receipt, go through them and only keep those that are really prudent. The less you have to sort through come tax season the better, so only keep essential and tax-related documents.

Write Down Everything
Whenever you make a tax-deductible purchase or any other tax-related move, write it down. This way you will have a quick and easy reference when you need it, saving you time and making sure you don’t miss a thing when tax season arrives.

Figure Out Your Income
Be prepared to know this number by heart during tax season. If you have had multiple jobs throughout the year, make sure to keep accurate records of your earning from each.

Reduce Bank Accounts
Consolidate your bank accounts and credit cards as much as possible. If you have a separate business card, savings account, or two, that is fine. However, having three personal checking accounts is more likely to confuse you when it’s time to track your financial history.

Sort Your Receipts
If you save every single receipt you get, you are going to have A LOT to go through when the time comes. Instead, only save tax-deductible purchase receipts.

Get Professional Help

When tax season is approaching, check out tax professionals in advance. An early start will ease tax stress and keep you ahead of the game!

Getting Prepared For Tax Time

Executive Summary About Getting Prepared For Tax Time By Larry Mccullough

Now that you have started blogging and earning some cash from your efforts, it is time for you to start thinking about tax time. Many bloggers get into the business without even thinking about the fact that they may ultimately have to pay taxes on their earnings.

Yet, if you fail to report the money you have earned from your blog, you could potentially find yourself in a lot of trouble with the IRS. Therefore, if you haven’t already, you should start taking these steps in order to prepare yourself for tax time.

Keep Track of Your Earnings

The first thing you need to do in order to prep for tax time is to keep accurate track of your earnings. If you have affiliate links on your blog that are earning you some cash, for example, you need to keep track of the money you earn each month from these links. If you are selling a product such as an ebook, you need to keep track of these sales as well.

Fortunately, many affiliate programs will provide you with monthly statements and annual statements that summarize your earnings. In addition, if your customers use a company such as Paypal to purchase products from your site, you can make it easier to keep track of your sales by setting up separate Paypal accounts for each product or blog you own. Taking Advantage of Deductibles

As a business owner, there are also many deductibles that you may be able to take advantage of. Be certain to keep track of all of your business expenses in order to keep your overall tax burden down. You may be surprised by all of the items you may be able to deduct from your taxes. Some possible deductions include:

Business expenses for the use of your home if you do your work from home

A portion of your utilities if you do your work from home

Expenses related to travel associated with your blogging business (i.e. for attending conventions)

The cost of purchasing equipment associated with your blog, such as your computer, your printer and printer paper

Of course, it is best to consult with an accountant in order to be clear on what can and cannot be deducted from your business expenses.

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