Smart Tips for Tax Preparation

Couple preparing taxes

Tax season is upon us – and whether you use tax preparation software or hire a professional to prepare your taxes, these tips can help you get the job done right.

Get Organized

A crucial first step in filing your taxes is getting prepared. Give yourself plenty of time to get organized before filing your return or reaching out to a professional for assistance. This makes the process less stressful and reduces the likelihood of making a costly mistake.

  • Use a tax preparation checklist to make sure you have everything you need.
  • Save forms, donation receipts and other documents in separate folders for easy access.
  • Keep track of filing deadlines.
  • Have last year’s return handy for reference.
  • Select software support or a tax preparer if you want help preparing your taxes—read below for tips on making a selection.

Selecting Software or a Tax Preparer

Do Your Homework

When choosing software or a tax preparer, protect yourself by doing your research. Tax preparation software is popular with do-it-yourselfers. You can find cloud- or computer-based options. It’s difficult to say which one is the safer option. Before making a decision, consider your circumstances.

  • How much do you want to spend?
  • Are you filing a form 1040EZ or form 1040?
  • Are you filing in multiple states?
  • Do you want help if you have questions completing the return?
  • Will the company arrange for someone to accompany you to a meeting if you’re audited?

Check out reviews by NerdWallet on some of the leading online software providers.

Related: Free and Discounted Tax Preparation for Military

If you want one-on-one assistance or own a business or certain investments, look into hiring a certified public accountant (CPA) or other tax preparer. You’ll want to carefully screen potential candidates – if you’re audited, you’ll be held accountable to the IRS.

  • Ask for and check their references.
  • Make sure they will accompany you to an audit.
  • Find out whether the office will be open after your return is filed in case you or the IRS need more information.

Watch for Red Flags

The old saying, “If it seems too good to be true, it probably is,” applies. Be skeptical. Don’t hire a tax preparer if they:

  • promise a refund before they have actually reviewed your tax information
  • guarantee an exact refund amount after only seeing your W-2 form
  • say their fee will be a fixed percentage of your projected refund

File Your Tax Return

Even if you have assistance with tax prep, you may need to actually file the return yourself. The IRS recommends electronically filing your tax return. You’ll get a refund faster using IRS Direct Deposit. The agency says it usually takes less than 21 days to receive your return when you e-file and use direct deposit versus six weeks when you send the tax return by mail. If you owe money, use IRS Direct Pay to send funds from your checking or savings account. Remember to keep a copy of your filed tax return.

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