Tax Preparation (2)

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Tax Preparation

Tax is a compulsory cost or other levy enforced on an individual or even a legal entity with a state or a useful equivalent of a state. Having to pay taxes on time is one thing that is mandated legally, and hence an exercise a law-abiding citizen should adhere to. Let us discuss the actions involved in the tax preparing process:

The first step in tax preparation is always to calculate your overall income. Your income alone is not the total income. Your total income is calculated by gathering different varieties of income – salary, alimony, interest, money won through lottery, profits acquired from real estate or even stock investments – and summing up each one of these amounts. While calculating your total earnings it is essential to collect all the relevant information regardless of the sort of money you acquired during the particular economic year. You must end up being systematic in your taxes preparation as Interest rates financial penalties because of not providing your correct income can be extreme.

The next step in the taxes preparation process would be to calculate the total amount regarding deductions which you can affect your total revenue. Deductions are mainly grouped as adjustments as well as exemptions, and itemized and standard deductions. Right after gathering all these deductions you need to subtract just how much of your deductions from the total income. The result is the taxable revenue and the number can then be found in the desk provided with the tax form. This helps you to definitely know the tax amount you may need to pay for that economic year. The last step up tax preparation is always to deduct your taxes already paid including any credit due and also employer withholding. Following successfully completing these types of steps, you will know whether or not your payments and credit will totally cover the amount of taxes due for that year.

If you wish to make certain you are paying the cheapest tax amount possible, you need to devote a lot of time in your tax preparation. You should check out whether your own itemized deduction amounts tend to be more than your regular deduction amounts. The standard deductions generally depend on your filing status and are generally altered every year for the cost of living. It is seen that the standard deduction amount for many people is greater than their total itemized deduction amount. According to taxes experts it is well worth computing the total itemized deduction amount during your duty preparation process. Some of the items which can be included in the itemized deduction category tend to be State and local income taxes, medical expenses, expense expenses, and mortgage loan interest.

All the changes are considered as breaks and the taxpayers are usually permitted to claim all of them. It is recommended one should verify his deductions very cautiously during the entire duty preparation process. Based on law, every american and his/her dependents are usually qualified for a personal exemption. For this reason, during your tax preparation process make sure that all of your being approved dependents have been integrated for personal exemption.

Comments: 26

  1. Jerrod February 15, 2013 at 7:15 am Reply

    Consider the following two scenarios.

    1. Successful individual with six figure income and significant assets hires tax attorney/account to ensure every deduction and technique to reduce tax liability is explored and taken advantage.

    2. Same situation as above but individual encounters serious financial downturn due to job loss or failed investments. Decides to exercise bankruptcy protection and hires attorney to ensure he is able to protect as many of his assets as possible and reduce financial liabilities as allowed by the legal process.

    Both have acted legally. Is there an ethical difference between them? Is there an ethical duty to pay taxes as required by a democratically elected government? Is there an ethical duty to pay private debt? Is there a difference between the two?
    Good answer; I ask because I recently heard an argument that people who use bankruptcy law to their advantage to resolve a financial problem are unethical or immoral.

  2. Pedro February 22, 2013 at 7:23 pm Reply

    I wanna know the definitions of tax deductable and Tax Write off, what do they mean, and what advantage do you get by them?

  3. Deedee February 25, 2013 at 11:57 pm Reply

    does the 2% Floor on misc deductions apply to each misc deduction on your list, or all your misc deductions added up?

    Example…I have some Unreimbursed employee expenses, but if they don’t exceed over the 2%, this means i can’t deduct it? or what about Tax-preparation fees?? when i bought the “H&R Block software” it said that it was tax deductable…but since it only cost $50 bucks, how can I deduct it if it isn’t over my 2% AGI???

  4. Phillis March 4, 2013 at 12:15 am Reply

    I received a coupon in the mail for $25 off tax preparation at H&R Block. I’m wondering if they can offer such a significant discount how much it typically costs. I usually have my parents prepare my taxes for me but would like to start leaving them out of my finances if possible.

    I’m a 25 year old, single woman if that makes any difference.

  5. Felisa April 21, 2013 at 4:32 am Reply

    I read for my last 2 digits of my social they should be here no longer than the 16th. They have not arrived, But my mom told me that she heard if you got your checks done by a tax preparation place that you will get them back in July.

  6. Ignacio June 5, 2013 at 4:50 am Reply

    My husband seems to think that we should be able to claim the cost of preparation of 2009 taxes as a 2010 deductible. I think he’s wrong. Anyone know for sure?

    We live in Pennsylvania if that matters.
    Thanks everyone for taking the time to answer, I’ll be serving humble pie for dinner tonight!

  7. Glynis June 5, 2013 at 4:50 am Reply

    I am graduating with an accounting degree in a few months
    and will be eligible to sit for the CPA exams once I graduate. Therefore, I need to decide if working at a big four firm will be right for me. I’m very hardworking and don’t mind the long hours but have a family to consider. I know it will be hard on my husband to take care of our toddler by himself and don’t want to make that sacrifice unless it will greatly benefit my career.
    My ulitimate goal is to open my own accounting practice that focuses on tax preparation, obviously for private companies and individuals. Before doing this, I want to spend a number of years as an employee at accounting firms. So my question is, will spending 1-2 years at a big 4 firm boost my career when it comes to finding work at a smaller firm? The smaller firms will allow me to gain the knowledge I need to open my own practice, so should I really consider going for one of the big firms or just start our at a small or medium sized firm?

  8. Yetta June 26, 2013 at 12:23 am Reply

    I’m 18 and am wondering what are the basics of filing taxes. I know I need to go to an expert and give them all of my expenses for the year..and my income…what else? What are some tips for filing….where should i go to file? Where is best?

    And lastly i know i’m supposed to keep my receipts for expenses. Do you think if i scan all of my reciepts into my computer….would that be ok if i am audited?

  9. Dave June 26, 2013 at 1:09 am Reply

    I’m taking a class on Individual Income Taxes. I need to complete a very complicated tax return.

    Can you recommend a good tax preparation software that doesn’t cost a small fortune.

    Thank you for your assistance.

    I appreciate it.

  10. Caron July 1, 2013 at 2:15 pm Reply

    I know there’s a lot of tax preparation places that accept your last check stubs, but I don’t have all of them. Is there another way to go about getting my W2 forms now or getting another copy of my last check stubs? Thanks!

  11. Zena August 12, 2013 at 7:38 am Reply

    I lived in ohio in 2011 not in 2012. I saw my 2012 W2 and they were deducting Ohio tax for two counties i lived in. I am applying for tax return on Turbotax.com and it doesnt show me any return from ohio since i wasnt there last year. I talked to my employer and they saying you would get it in tax return which i am not.

    Any idea how can get my ohio tax return?

  12. Nathanael December 13, 2013 at 2:27 pm Reply

    I am starting a tax preparation business and I wanted to know if I have to keep copies of customers tax info and social security cards just in case I was to get Audited? Any small business owners or tax preparation services with experience in this area comments are appreciated. Thanks.
    FYI – I have an associates degree in accounting. I am 4 classes away from my B.S in Accounting.and I do taxes on the side but I’ve never done it under a business name.
    Also, I am in the process of becoming an authorized e-file provider. I never made copies of anyone’s personal information when i was doing taxes just to help out but now that I am starting a business I wanted to make sure that if I were audited I kept the right information. To re-iterate, I am experienced doing taxes, however, I never perfomed these services under my own business name.
    I do have a PTIN…

  13. Yuko December 23, 2013 at 11:30 am Reply

    Today marks week #3 of job interviews where I have had an illegal immigrant completely disrupt my hiring/ interview process. Here in Tampa I have my own business Tax preparation and cost deductions. I hire not just the educated employees but also non-experienced employees as well that can do low level work. Out of the 8 individuals who came into my office today looking for work, 2 of them were illegal immigrants. I made it clear that I practice good business models and I do not hire those who are not legally authorized to work in this country. Instead of accepting that fact I got once again lip and arguments on how President Obama has given them Amnesty, how I have to give them equal opportunity and pay them the same as any working American and how I cannot discriminated against them. My usual response, “Pres. Obama does not run my business, I do. And Pres. Obama to this day is making a promise that still is not legally bound. And if you don’t like it call up the President and have him give you employment. Now leave before I call the police.”
    This wasn’t an issue before but for some reason it is an issue now and my interview process is being slowed down and I am being painted as being a discriminating person because I follow the law. Why is the President so bent on hurting small businesses?

  14. Tyree February 3, 2014 at 8:37 am Reply

    hi guys i need some help i move from Seattle to Arizona Glendale and i don`t any good place to fill my taxes most place i been too the want to charge me alot with small amount of the refund. and i didn`t that much last year but i full time student and i pay for my classes no government help (FASFA) please some help

  15. Ignacio February 21, 2014 at 9:44 am Reply

    im 21 yrs old and this will be my first tme filing taxes. i dont wanna pay for someone to do it because i dont wanna end up paying more than i get from the irs. ive only had one job since last april.

  16. Billi February 21, 2014 at 4:11 pm Reply

    I recently graduated with a Bachelor’s in Business Admin. I am looking for temporary work because I know that I am moving in approximately 7 months. The opportunity to work for People’s Tax as a tax professional has come up. However, I am wondering if such places (like H&R Block and Liberty Tax) are considered to be a joke in the accounting world; also if putting such an employer on my resume would actually put it in an unfavorable light. I know that a job is a job to some people, but not to all. I am hoping to get a salaried position after moving as an administrative assistant or entry-level tax professional.
    This is why Jessica will be working retail for the rest of her life. She’s already so embittered with her lot that she must troll through Yahoo Answers and post negative comments so everyone will be as miserable as she is.

  17. Cody February 21, 2014 at 6:48 pm Reply

    I live in Ontario, and i’m a student who’s going to be doing my taxes shortly.

    Are there any companies that do taxes and give you your refund the same day, without having to wait months for the goverment to mail you the cheque?

  18. Ingrid February 22, 2014 at 6:32 am Reply

    So I was about to sign up for course with H&R block but when I was bout to finish registering for the class i read their policy saying that you cannot try to work for a competitor after taking their course. So this is not going to work for me as I am trying to form my own company. I called the H&R block CS number and they told me first that it was ok if I try to start my own business as long as I dont try to work for a competitor. But then i called twice again to make sure and then they told me that I cannot create my own business if I take their courses.. I am lil upset and confused.. what is my other options. Please help.
    They offer a 10 week onsite course.

  19. Ngoc February 22, 2014 at 6:32 am Reply

    I would like to know how many people out there think turbo tax is a good alternative? I have always gone to a local tax place but would like to know if it’s really as complicated as people say ut is to do your own taxes. what do you all think?

  20. Phung March 9, 2014 at 8:44 pm Reply

    i filed my taxes online with H&R block taxcut, but i forgot to add my other w-2 since i worked 2 jobs in 2007(i only filed one w-2) plus i got an email the next day from taxcut stating that my tax return wasnt able to be sumitted due to some issues, so …is it ok if i just go to some other place in person to file my taxes instead of going back online and fixing all of my issues? im really new to this so im in extra need of help and im tired of struggling so, IS IT OK TO GO IN PERSON TO A PLACE AND GET MY TAXES DONE???

  21. Ula March 9, 2014 at 8:45 pm Reply

    So I’ve worked this summer as an intern at a lawfirm and got paid well ; however , they took off alot in taxes . I know Im supposed to get a refund check or something of the sort, but my dad claims me when he does he’s taxes I believe . Like idk any of this , I just turned 17 , and I’m not sure how this process works . I worked last summer at a small court and they also took off taxes . But when my dad got his tax refund check he didnt mention anything about a check that I might have gotten like how does that work? Should I file taxes as young as I am? Someone help lol 🙂 #growing up is scary 🙁

  22. Robert March 14, 2014 at 5:16 am Reply

    I dont want to do them myself. i had a friend that went to J. H. and they charged him $60. he only had 2 w-2’s. i have 4. will it still be $60 or will it be more b/c i hav 4 w-2s

  23. Marguerite March 21, 2014 at 7:45 am Reply

    HI I need to file my income tax for 2012. I was not able to file on time, but i need to file for them ass soon as i can. My question was, is Turbo tax a reliable software? I need to do my own taxis because i do not have the money to pay some one to do it for me. Has anyone use the free IRS version to do their taxis? I am single, and i have three W2 forms no deductions. Is it difficult or is there something i need to know ?
    Thank you all very much

  24. Latosha March 21, 2014 at 7:46 am Reply

    can anyone tell me the best tax preparation company in phoenix az. I need someone to do my business taxes and my individual taxes for 2013. I am familiar with the tax preparation software but I would rather hire a small business mom and pop shop to do my taxes for me. Can anyone tell me one that they know that is trustworthy and has references. I appreciate you guys help

  25. Wilbert March 28, 2014 at 3:38 pm Reply

    I’ve completed a tax course with one of the larger income tax prep businesses so I already have a tax preparer identification number. I plan to purchase professional software. Is there anything else I need to do? Do I have to have a business license? I will be running this business in the state of Georgia.
    I have worked with the place I took the course with as well as helping prepare taxes for family and friends for the past couple of years. I know that no two returns are the same. Yes, I have someone who works directly with the IRS who can help me with any question I have. Also, yes, I plan on doing this by myself but have a limit on how many and what type of customers I have. I do not want any that have rental properties or whose income is solely from 1099 misc. I have a feel for it, I just need to know how to get started.
    David S – when you talk about making mistakes with the IRS, are you speaking from experience? This is my biggest fear with getting into this line of business.

  26. Rosario May 12, 2014 at 11:09 am Reply

    I whent to H&R block they told me I would only get back $430, then a buddy of mine told me to go to his moma pop shop tax services and they got me back $1200. Why can one get more than the other. I am fileing the short form and both made the same inputs and such but got different results… why?

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