Tax prep is a $12 billion business today. It’s always in demand since people that are gainfully employed are required by law to file taxes annually.
While tax pros are invaluable, you’re not required to outsource this service. Doing your own taxes can be intimidating if you’ve never done it before, but plenty of people do it every year.
Is it hard to do your own taxes? Read below to find out.
Consider Your Tax Circumstances
First, familiarize yourself with your filing status so that you can get started on the right track. This means deciding whether you should file as an individual, married filing separately, or married filing jointly.
Consider the type of work you do and whether your taxes are straightforward or complicated. If you just work a job and get W-2s, it can be a pretty straightforward process to do your own taxes. But if you own investment properties, run businesses, or have capital gains taxes to pay, there may be some complications that make it easier to outsource the work.
Research and Use the Best Tax Software
Take the time to find a tax program that will help you out. There are so many platforms available today that make it an easy process. Figuring out how to do your own taxes is easier with these software platforms, because they are graphically intuitive, have clear explanations, and ask you a series of questions to point you in the right direction.
It’s the best way to do your own taxes, so figure out which tax software platform is best for you.
Keep Tabs on all of Your Documents
Tax preparation is a year-round process. You can do your own taxes without stress when you keep up with the important documents. Set aside things like bank statements, prior year tax returns, receipts, bills, and other documents.
It’s particularly important to hold onto your documents if you’re taking deductions, such as the home office tax credit or write-offs for your gas mileage. You’ll be able to plug in the correct information so that you maximize the deduction to get the credit that you deserve.
While most people never have to worry about an audit, it’s also important to have the right information so that you can defend yourself in the event that you do get audited. Hold onto hard copies and digital records, and take the necessary security measures for your most sensitive information.
Once you learn tax preparation skills, you’re also setting the stage to learn more about business, accounting, and more.
Is it Hard to Do Your Own Taxes?
So, is it hard to do your own taxes? Not at all, as long as you follow the right steps! You don’t have to be a Certified Public Accountant (CPA) to take care of your taxes each year. Follow these tips to see if you’re up for the challenge, and then make sure to hit the deadline.
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