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Filing Income Taxes


Tax Preparation
It's a good idea to familiarize yourself with your income tax paperwork, because you'll be held responsible for any mistakes, including those made by a tax preparer.
It's a good idea to familiarize yourself with your income tax paperwork, because you'll be held responsible for any mistakes, including those made by a tax preparer.
Copyright 2008 HowStuffWorks

Seek professional help. If you itemize deductions, are self-employed, sold a house, or have any other special schedules to fill out, you may benefit by hiring a certified public accountant (CPA) or tax preparer to complete your tax return. The preparer could save you more money in taxes than the fee charged. A good professional tax preparer spends hundreds of hours working on tax returns and attending seminars and continuing education courses. If you do hire someone to fill out your return, be sure that the preparer has other clients in situations similar to yours. That will tell you that he or she has the background to know how to find all the deductions you are allowed.

Seek knowledge. No one knows your special tax circumstances better than you do. Don't rely on your tax preparer to be a mind reader. You must become aware of the kind of information you need to pass on. Ask questions and be sure to mention any financial changes that have occurred over the year. Things that seem insignificant might have a big impact on the taxes you may owe.

Negotiate the fee. Be sure to ask the tax preparer about ways to keep the fee as low as possible, and negotiate the fee up front. You probably will not be able to negotiate the fee with a large firm or a tax preparation chain, but a local CPA firm or bookkeeping service might be willing to negotiate a lower rate.

If you have your taxes done by a tax preparation service, think twice before you opt for the "instant refund" loan the service provides. When you put the numbers to these loans, the annual interest can translate into a whopping 50 to 100 percent.

Review your return. Always check the return for accuracy before you mail it or submit it electronically to the IRS.

Recheck the math. Make sure all your dependents' social security numbers are listed. If you file a joint return, be sure that both of you sign the return. Send your return via certified mail. Certified mail costs money, but anything can happen. Keep the receipt with your copy of your return. If the government claims that you were late with your return and wants to charge you interest, you have proof you sent it in on time.

Read on to find out what you should do after you file, whether you receive a refund or owe a balance to the IRS.


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