Tax Filing Software

There are many advantages to filing your income taxes early. Whether you do them yourself or have someone prepare them for you, filing early will give you the time to put all your records together and make any changes before the April 15 deadline. Filing late could mean penalties and interest from the Internal Revenue Service (IRS). Below are some tips to help you prepare and file your return in a timely and orderly fashion.

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The first and most important step is to gather all your documents and records to support your income, expenses, and tax deductions. The most common document if you have a job is the W-2. For business owners or for those otherwise self employed, the 1099-misc is the most common document. Common to both wage earners and business owners would be the 1099-int for interest earned on savings accounts and investments. Tax deductions like your mortgage interest, charitable contributions, and donations to a church will also be very common for most people. Putting these documents together will take a considerable amount of time, so start as early as you can. You should have most of these documents by end of January and early February.

For those who have only a W-2, don’t own a home, and have no interest income or investments, you most likely will be able to file your taxes on your own Virtual Tax Services . Just fill out a 1040ez form. It’s a simple one page form from the IRS that needs little more than your name, social security number, address, and information directly from your W-2 form. This form should take less than 15 minutes to complete. Just follow the step by step instructions, then mail it before April 15 to the IRS.

However, if you have additional taxable income such as interest income (1099-int), or get a 1099-misc from anyone, you will need to file a standard 1040 form along with the additional forms such as a schedule c. This is common for wage earners who own substantial assets such as a home and investments. Contractors, business owners, and self employed people will also need to file a 1040. If you have formed a corporation, LLC, or other business entity, your tax return will be much more complicated and require a much higher level of expertise. Depending on your tax liability, you may want to consider hiring a tax professional who is also a Certified Public Accountant or CPA.

For middle income wage earners with assets and small business owners who want to prepare their tax return on their own, you will need to use the latest income tax filing software. Today’s tax software is very sophisticated and can handle most small business, corporations, and self employed people. It will guide you step by step, asking you for basic information like name, social security number, and address, then moving on to required documents. It will also do a virtual interview with you by asking specific questions about you, your family, business, assets, purchases, and much more. The software will find many deductions that you may not have considered which can save you thousands.

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