You'll Increase Your Tax IQ
I know, I know, taxes aren't exactly a sexy, fun topic. Seriously, when's the last time they came up in conversation at a party (well, a fun party, anyway)? Be that as it may, you should have a good grasp on your financial situation, on a monthly and annual basis, so that you know how much you have to work with and whether your situation is changing for the better or worse with each tax year. Learning more about the process will also help you identify the best ways to legally avoid or reduce your taxable income, such as establishing retirement savings accounts like a 401(k) or individual retirement account (IRA), making charitable contributions or writing off home-based business expenses.
Just because you use a tax preparer doesn't mean you'll automatically get a bigger refund. If he or she doesn't ask you the right questions, it's frighteningly easy to miss out on lucrative deductions and credits. For instance, if you replaced your heating and air condition system during the year but your tax preparer doesn't happen to ask about it, you may lose out on a credit or deduction.
You don't necessarily have to enroll in community college to learn the ropes, though. Talking to friends in similar situations and doing a little light tax reading is enough to get you on the path to personal tax accountability. Your tax software will also ask you about life changes to guide you as do your taxes and steer you to potential credits and deductions.