Preparing Your Tax Returns

As April 15 approaches, you need to start paying attention to your tax returns. You know you have to do it, but you put it off and eventually it catches up to you. But it's not that bad. If you muster up all the guts to do it and get it over with, it's easy. The hard part is motivating yourself.



If you don't have a very complicated financial situation (no house, no major investments, don't own your own business) then you should probably be able to prepare your tax returns by yourself. If you have a more complicated lifestyle, don't have time or will power to do your own taxes, there are people who can help you.

Doing your own taxes have many great advantages:

• You learn about important tax codes

• You get a clear picture at where you stand financially

• There are IRS return instructions that make it easy!!!

The big advantage is the second one above. If you do your taxes, you will see exactly all the numbers on how much you've earned during the year. If you have investments, it will clearly show you what deductions you are eligible for. And knowing your net worth is just cool! You will know exactly how much you are worth, and you can use that to help you figure out important financial decisions based on this information.




Using A Tax Preparer

If you decide you don't want to do your taxes yourself, there are people you can call. Like H&R Block's motto states: "I've got people." There are different levels of help you can get. They all call themselves something different, but they all do the same job.

Tax Preparers - They have the least training and experience usually. They don't need a license to do what they do, and many of them work part-time. These are people who work for H&R Block and such. You'll be charged somewhere between $100 and $200 for your return.

Enrolled Agents - They are licensed and represent clients in the event of an audit. They probably have trained as tax preparers and continued education to get a license, therefore, they charge more.

Certified Public Accounts (CPAs) - They go through intense training and certification programs to get a license and receive the role of "professional". They charge per hour, but mostly business owners use them because they are meant to tackle the more complicated types of tax issues.

Tax Attorneys - They charge the most because they know the most. You probably won't ever need them unless you life gets incredibly complicated with legal issues involved.

If you do choose to go with a Tax preparer of some type to do your tax returns, make sure you find someone you trust. Once you find someone whom you like, you can keep going to that person every year (because they will already have your information on file).


Click here to learn about tax deductions.

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