8 Essential Tips For Personal Taxes And Accounting

A very important part of personal financial planning is tax planning. This article will help you take the mystery out of personal tax Planning by providing a financial planning perspective for your overall tax situation.

1. Be aware of the different types of taxes
Many people are not aware of the different types of tax systems that we have. Income: Federal, State and Local. Real estate tax. Tax on Investments: Dividends, interest, capital gain, and passive income on stocks, bonds, mutual funds, and investment real estate. Estate or Inheritance Tax: Federal and state tax due on the estate or the inheritor. Gift tax: tax on giver of large gifts. Entitlement Tax: Social Security and Medicare (FICA), Federal Unemployment (FUTA). Sales, self employment, and corporate taxation.

2. Consider working with a Qualified Tax Professional
Tax planning can be complex for many people, therefore it may be wide to work with a trusted professional tax advisor.

Tax advisors not only prepare your taxes but can help make decisions that will affect your future. They can serve as advisors for a whole host of matters and they can represent you if you face the dreaded audit. Consider the following when selecting a tax professional:
- Local: Someone that you can easily meet with face to face
- Personable: Someone that you can interact with and who cares about you
- Proactive: Some tax preparers simply look at your previous year’s return and plug your current numbers into last year’s format. This of course assumes that last year’s preparer knew what he/she was doing. Try to find a preparer who knows your situation. A proactive professional will ask questions that will help you anticipate changes in your tax situation to help you properly plan in advance
- Reputable: Find a professional with a good reputation. Ask people you admire for a referral.
- Skilled: Look for an accountant that is very competent. You have to be smart to obtain a degree in accounting or law.

Fees: Find out up front what they estimate their fees to be, what they charge to file electronically and whether they will represent you in an IRS audit. Avoid any ‘early refund’ ploys. Some well known tax preparation companies ‘provide’ this service which charges a hefty fee (with a lot of small print) and a lot of advertised hype for you to get your refund ‘early’. It is basically a high-interest loan. Just waiting for your actual refund will save you a lot of money.

3. Remember, tax preparation entails both art and science
The science involves the mathematical calculations that in most instances can be figured using calculators and software, and the infinite number of complex tax laws.

The art of tax planning comes into play with interpretation of any special circumstances. There are some areas of tax law that leave the government’s intentions unclear. No law can completely anticipate each person’s situation. You could call a dozen different IRS agents with the same question and get as many different answers. A proactive planner will research any unusual circumstances you may have and help you plan a course of action.

4. Doing Your Taxes Yourself?
I firmly believe in getting professional tax assistance. However, I realize that many people prefer to do their own taxes perhaps to save money, or perhaps you have cleaned up the mess a ‘store front’ preparer made of your taxes and vow to do your own. It has been my experience that often the professional tax preparer has saved us the amount of their fee in our taxes. The peace of mind that the taxes are done right has a value all its own.

However, people who have prepared their own taxes at least once with paper and pencil or software usually understand taxes much better. If you self-prepare your taxes, consider having a qualified accountant review them before you send them in. They may find things you or the software might have missed.

If you made less than $54,000 in 2007, you can file your taxes electronically for free through the irs.gov website www.irs.gov/efile/. If you use tax software and wish to e-file be aware of the fees so that you can budget and compare prices properly. For example, a download of Turbo Tax Home and Business Federal and State for 2006 cost just under $100 and the filing fees cost around $30. Some States allow you to ‘phone in’ your State return for free.

If you choose to mail your return, go to your local post office and send it ‘Certified Return Receipt’ mail to insure that you have a record that the IRS received your paperwork. This will cost around $10 or less and will be worth every penny should the IRS contest the receipt of your return.

5. Keep great records
If you are already very organized you may read this section just to feel great about your organization skills or skip to the next section. If, however you have heard ‘get organized’ many times before and if you are the type of person who balks at the idea of organizing that mess of receipts just remember how you felt last year as tax time approached. You could become organized in only one evening of television viewing with the right tools. Arm yourself with an accordion file with at least 16 sections. Label them according to your situation or use the following sections: Auto, Bank, Business, Credit Cards, Dental, Medical, General Receipts, Grocery, Income, Insurance, Mortgage, Utilities, School, and Taxes. Now sort your receipts into these sections. Organizing your receipts will help you “Take the mystery out of…” your financial situation. Use a new accordion file every year. Not only will this help you find needed information, it will also help you find a receipt in case you need to return an item you purchased. . Your tax professional will be sending you a tax organizer the end of December or the first of January. In this organizer will be a list of information that you will need to gather. Becoming organized will help you easily gather the information you need to fill out your tax organizer.

6. Start early
Do not procrastinate on your taxes. Tax professionals are unbelievably busy January through April. Firms who prepare business returns also have a crazy March 15 business deadline. We are providing this information because we want you to get the most attention from your preparer during their craziest season. As soon as you get your organizer, begin gathering the needed papers. If you are only missing one or two pieces of information return the organizer to your accountant with a note that says what is missing. They will begin entering the information in their software. Try to get a January or February meeting with your accountant. These months are the best to meet because they will have more time to spend with you and they will be able to think proactively. If you are looking for a professional, start looking now.

Another reason to start early is allowing yourself time to look for records, ask financial institutions for copies of lost information, or calling investment companies for statements.

7. Judicious Paycheck Tax Withholding
Many people like to overpay their taxes, so that they get a nice refund in time for vacations or other wants and needs – Kind of like a forced savings. Overpaying taxes is like a giving the government an interest free loan of your money.

Good financial management involves developing savings habits so that you set aside money in an interest bearing account from each paycheck for future needs, wants and emergencies. This helps you to avoid using credit cards for those things and not having to wait until refund time. Secondly it then allows you to manage how much you can afford or are able to put into 401(k) plans at work. This accomplishes two things, first you are managing your money better and you are saving for retirement. Saving for retirement in tax deductible retirement plans like 401(k)s will also lower your taxes, enabling you to save more for retirement and everyday needs and wants.

If you want to lower the taxes that are being withheld from your paycheck, file a new W-4 form with your employer to claim an additional withholding. Make adjustment for getting married, divorced, having children and for increasing contributions to tax deductible retirement plans. Your accountant will help you estimate this.

8. Tax planning is not the tail that wags the dog
Taxes consume a large if not the largest single percentage of your income, therefore good financial planning should strive to lessen them, by whatever means possible as allowed by law.

However, tax planning is not the only core issue of good financial planning. Tax planning works in concert with your overall goals and your individual situation.

Posted in Uncategorized | Comments Off

Free Tax Help – How To Find It

Finding free tax help is much simpler than you think. Even though there are several ways to do your taxes, most individuals still try to do it on their own, without the assistance of professionals services. This may be a very good thing and is absolutely the most affordable way to file your taxes, but it also means that you have to face problems and questions on your own. Since errors on your taxes could be costly and long, drawn out problems, it is best to have the ability to seek the help you want beforehand. If you would like free tax help, know exactly where to go before tax time hits. Reading all this about taxes is sure to help you get a better understanding of taxess. So make full use of the information we have provided here.

There are several people out there who do not know much about taxes. This is the reason we have compiled this article on taxes, to let them learn. The best place to begin for the free tax help that you need is right from the source. The IRS, or Internal Revenue Service, is perhaps the most reliable source of help you will find, if you do not mind waiting for assistance. There are phone numbers available depending on the kind of question or need that you have. You may also find local organizations to provide help that are branches of the IRS. Yet, perhaps your best source of information and free tax help is from the IRS’s website at IRS.gov. It is a comprehensive web site that provides several tools for you to use including forms and instructions, tutorials, frequently asked questions and search tools. The more specific the kind of help you need, the simpler it will be for you to locate the free tax help you want from their web site.

There are also other places to get the kind of help that you need. During the months of February and March, you will often find tax preparation help locally from non profit organizations. For senior citizens, this might be through the community center or those organizations aimed at seniors. This is a good way to work hand in hand with a professional, or a knowledgeable person, for your tax needs. This kind of free tax help is often available through local governmental offices and may also be used for city, state and county taxes. We are proud to say we have dominance in the say of taxes. This is because we have read vastly and extensively on taxes.

Perhaps the biggest source of free tax help is online. You will get a range of web sites offering help, but be careful. Outdated information or even mistakes may often be found on the web. Make sure that you know who is providing you the help that you need before you use it. After all, getting the assistance that you need, begin with someone having the necessary knowledge. For free tax help, begin with your own local organizations or go right to the IRS for their ability. This article was written with the intention of providing as much information on taxes to its reader. Hope this objective has been fulfilled.

Posted in Uncategorized | Comments Off

Online Tax Help: Making The Best Of It!

There are several options when it comes to online tax help. You will find tutorials, forms, web chats and filing instructions as well as a variety of software products to actually assist you to fill out your forms easily and get them turned in. The assistance you want is available within a matter of minutes. Online tax help is something that you should take advantage of since it is readily available to you. Today, you could log into any of these helpful tools, ask for help with your taxes and be speaking to a tax professional online in mere seconds. You could get your questions answered and have your taxes file fast and effectively.

You should consider the source when you are looking for online tax help. You want to make sure that you are receiving advice from a reputable provider and that the information is up to date and the most current. Since tax laws change many times during the year, in some situations, you should be careful that the tax help that you are getting is correct. Otherwise, it may result in a very costly error. Also remember that no matter who does your taxes for you, you are solely responsible for them even if there are mistakes in them!

Nevertheless, many of the online tax services available today is going to be good quality help. If you have any questions that you can not find an answer for, you could get a variety of solutions available including question and answer sections of most tax based web sites. If your question is in regards to tax forms, a great place to get all of the forms that you want is all on the IRS web site. There you may choose the correct forms as well as get the instructions for completing them. Many tax help online is also available to you from the IRS.

If you require more tax assistance, such as a professional to do your taxes for you, there are a several options available. You may begin by using good tax software that is available right online. Fill out the forms, answer the questions and they will assist you to file accurate returns. You can find these online or through programs you can buy as well, just be sure that they are 100 percent updated. Or, you may find real tax professionals working online that will help you. You can locate them and work with them online to get your taxes done. All of these solutions are options that are now available to you. Online tax help is readily available, assuming that you know what kind of help you need.

Posted in Uncategorized | Comments Off