Preparing your taxes can be daunting and stressful, especially since the average person is not an expert on tax rules. So here are some basic tax preparation tips to help make your tax preparation go a little more smoothly.

Choosing the Right Forms

Everyone needs to file some type of form 1040. There is the 1040EZ form, the 1040 or the 1040A form. 1040EZ is for people whose income is less than $50,000 annually and earned interest is less than $400. It also the form to use for people who are not itemizing deductions, who do not have dependents, who are not blind or over sixty-five. The 1040A is for those whose income is less than $50,000 and do not need to itemize deductions. The 1040 form is for everyone else.

There are various other forms known as schedules that are also often needed in conjunction with the 1040 forms. Schedule A is used to itemize deductions, schedule B is used to report taxable interest or dividends greater than $400, schedule C or C-EZ is used to report business profits or losses, schedule D reports capital gains and losses, schedule E reports supplemental income and losses, and schedule EIC is used to claim earned income tax credit.

Gather What You Will Need to Fill Out the Forms

There are numerous papers, forms and quite a bit of information that is needed to prepare a tax return. Even if you are not preparing your own taxes you will need to provide these things for the person that is.

· W-2s · 1099s · Receipts and records for a business or extra income · Social Security Number · Records of losses, or profit · List of life events that may be used to get deductions such as marriage, and moving

Filing Out the Forms

This is the part that takes the longest. Every household and individual situation is different, so it would be impossible to explain everything th

at a taxpayer would need to know to finish their return, but there are a few general things to know that will help your return be processed faster.

·Round money amounts to the nearest dollar, this reduces errors and the IRS does not expect you to follow pennies throughout your return.

·Make sure your return is neat; if you need to start out using a pencil then go back when you have finished and write it in with pen.

·Make sure to file on time, even if you owe money and can't pay. You can always file for an extension and will have fewer penalties if the forms are in on time.

·If you owe money use a 1040V form to help the payment process go more smoothly. You will also want to have your social security number somewhere on the check so that the IRS can identify you specifically.

·Keep tax records for at least three years. If needed you can use a tax return from a previous year to help remind you of deductions and other information.

·You can get help even from the IRS. There is a recorded information service supported by the IRS that has answers to questions on more than 140 topics. To reach this service call 1-800-829-4477. There are also volunteer services that will help answer questions and guide you through your tax return.

Tell Your Friend