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Are you tired of Tenants, Toilets and Trash?
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Wouldn't you rather go to Tahiti?
Are you a landlord with rental property whose value has
significantly appreciated?
Are you ready to cash in those profits and take that trip...
Cafeteria Plan Employee Benefit Should be Another Feather in Your Benefit Program's Cap
IRS code allows for employers to implement a pre-tax Section 125 Cafeteria Plan as an employee benefit. This plan allows for unreimbursed insurance expenses to be paid pre-tax. Examples include insurance premiums, doctors office co-pays,...
How Much Do You Really Need to Make as a WAHM?
Many of you have been thinking about staying home with the kids, but aren’t sure they can afford to do so. Living expenses are so high these days, it is almost impossible to make meats end on one income. The idea of coming up with an income close to...
How To Realistically Set Your Fees - Part 4
Effect Of Bad Debts
So far, we have covered the major factors involved in setting your fee structure. We have set a realistic number of billable hours, calculated the effect of expenses and taken into account the cost of a benefit package.
...
How To Start Your Own Business and Be Successful
In the Movie and Play “South Pacific” there is a song called “Talking.” The words to that song go like this. Feel free to sing it. “Talking, talking, talking, talking, talk. Talk about thing you’d like to do. You have to have a dream. If you don’t...
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Do your own Taxes!
So, it’s the second week in February - have you done your taxes yet? What, you don’t do your own taxes? You pay someone else to do it for you? Well, I’m one of those people who can’t stand paying anyone for something I can do myself. Am I a glutton for punishment? Maybe. Cheap? Definitely. And I’m a Jack of all trades and master of none. I’ve dabbled in auto mechanics, small electronics repair, ceramic floor/wall tile, drywall, carpentry, and the list goes on. I’ve even been going by Webmaster as of late. But, getting back to the subject at hand, I’ll put on my Tax Accountant hat for a moment.
I’m writing this to encourage everyone to do your own personal income tax return. Aside from the fact that misery loves company, there are several legitimate reasons I feel you should join me in performing this annual ritual:
1. It’s fun! (okay, I didn’t think you’d buy that…)
2. It’s easy! (no?)
3. It’ll change your life! (?)
Alright, so the above statements are a little exaggerated - there are elements of truth in each statement. First, while not necessarily fun, doing your own taxes will definitely provide a feeling of accomplishment and perhaps even a boost of confidence. Having tackled this task that is perceived by most to be difficult and daunting at best, you may raise your fist victoriously and cry “Ha!” in the face of the bureaucrats responsible for the current tax code. After trudging through the overly complex and horrendously long and confusing forms, instructions and IRS supplementary documentation, you will emerge brimming with the confidence that having successfully completed your own return, there is not anything you can’t conquer – well, at least anything that comes on 8-1/2 x 11 forms. And hey, what’s more “fun” than staying up until all hours of the morning, fueled by chasing caffeine pills with coffee, with Jay Leno pontificating in the background while you stare at the computer screen and fine print until your eyes throb from the strain?
Now – about it being easy. Maybe that is oversimplifying the process a bit. Still, with the tax return software available, it’s certainly much easier than paper and pen. This is a must – go get a copy of Taxcut or TurboTax, it doesn’t matter which. But, since it doesn’t matter, I’ll tell you that I prefer Taxcut. Not because it’s superior or cheaper than TurboTax (it’s the same price and as for it’s superiority, I’m making an educated guess as I’ve never used Turbotax), it just happens to be the one I’ve always used. I’ve done my returns with Taxcut since 1996. It hasn’t let me down and I’m familiar with their processes, so I’ve stuck with them. Another reason might be that they are typically offered each year with Microsoft Money’s latest version free after rebate. As I have always used MS Money, this allows me to stay current by upgrading to the latest version for free after the rebate included with my Taxcut purchase. Similarly, Turbotax is paired with Quicken, so if you prefer Quicken to Money, go with Turbotax.
Associated Websites
Both titles use a process of questions and answers to guide you through filling out your return. Depending on the answers you give, you be taken to different sections as required and you’ll skip over the irrelevant stuff. There’s plenty of help along the way. If your unsure of whether a deduction applies to you or if you should include a certain form in your return, the help files offer great direction and provide several examples where you will find your situation described. If all else fails, there are links to the IRS website where you can access the bulletins that they provide for additional directions to each form in the return.
Taxcut will check your return for all types of errors, both typographical and comprehensive. For instance, if you mis-enter your SSN or forget to enter a value, it will prompt you to go back and correct this. It will also show you any items that are typical “flags” to the IRS. For example, Taxcut might say something like “Your total for charitable deductions is $5,000 – the average donations reported by people in your income range in 2003 was $3,000.” Not necessarily an error, but good to know so that you can make sure you have all the proper documentation to back up something that might raise an eyebrow at the IRS.
While you could probably still not refer to doing your returns as “easy”, these software packages have certainly streamlined the process.
Finally, will doing your own taxes really change your life? Honestly, I think in some small but positive ways, yes. The satisfaction of having completed this project on your own is somewhat uplifting and should give you a slight boost in self esteem. Add “I do my own taxes!” to enhance your resume. This certainly displays your ability to solve complex problems and shows your go-getter attitude. But seriously, preparing your return will definitely force you to pay attention to certain critical aspects of your own personal finance. It’s wise to be familiar with the tax code or at least the portions that pertain to you and effect your return. Arming yourself with this knowledge will allow you to plan and make future decisions with some idea of how your strategy will impact your tax standing. Knowledge is power and all that…
One parting thought – I cannot imagine going through this task, through all of the pain and suffering, questions and answers, receipt hunting, number crunching, gut wrenching process only to find that your refund calculates in the negative. So, if you are one of those unfortunate, under-withheld individuals who ends up owing Uncle Sam every year, then by all means, hire an accountant!
Brian Neuman
Webmaster
http://www.honeybeadjewelry.com
About the Author
Brian Neuman is a Project Manager for a major construction company in the midwest. His second shift job is being the Webmaster of Honeybeads, Jewelry by Melissa a web site dedicated to promoting his wife's small business selling custom, handmade beaded jewelry.
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