Do you prepare your own income tax return to save money on preparation? If you do, or you are planning on using this method on your next return, there are some things that you should know that will help you to avoid making costly income tax errors. Errors that can cost you some of your refund or that can cost you in time having to amend your return and send it in again. Here are some income tax tips to help you get started: 1. Make sure that you know which income tax form to use: 1040EZ (for single filers without itemized deductions), 1040A (for married filers without itemized deductions) or 1040 (for those who itemize deductions.) 2. Check for errors in your personal information on the income tax return such as your social security number(s), address, etc. 3. Take the most beneficial deduction. Depending on your circumstances, either the standard or itemized deduction may keep more money in your pocket. You should do the worksheet in your income tax instruction booklet to see which one would be best. 4. If you have a home office you can deduct a percentage of your mortgage interest as well as your utilities and other things you may have not thought of as business expenses. 5. Dont forget to take any medical expense deductions that you have available. If your employer takes out your health insurance after taxes and it is more than 7 percent of your total income, you can take this deduction. Include dental and prescription costs as well. 6. Make sure that you have all of your forms before you file your income tax return. Think about any extra jobs or pay you may have received as well as interest you have accumulated. 7. Take your state and local income tax deduction from the previous years returns. 8. Check the return at least twice for any math errors even if you are using a calculator. These can be very costly and are easy to miss. 9. Dont forget to get all of the necessary signatures on the return. If you are married filing jointly, you will need both spouses to sign. 10. Consider using tax preparation software. It is more accurate than self-preparation and it can be easy to use and understand and it will check your return for errors for you. You can also get free or low cost tax preparation through the IRS if you have a low or moderate income. |
