Preparing your own taxes can provide valuable insight into your financial life. There are many effective software programs such as Turbo Tax, Kiplinger's Tax Cut, and Web-based tools that help you prepare your tax returns, file them online and track your finances throughout the year.
But be sure to take time to get organized before taking on the challenge. You will need W-2 forms sent from your employer and tax statements that address returns on your bank accounts and investment holdings.
You can find Web-based versions of tax software such as Secure Tax or Turbo Tax that help you prepare and file your own taxes. These sites are best suited for simple returns, but the programs are becoming more sophisticated.
The two most popular computer programs are Kiplinger's Tax Cut and Turbo Tax, said Mike Lange, manager of Office Depot, 2525 Iowa.
"They're basically the same, usually we see people sticking with the same package year after year," he said, "but Turbo Tax has a few less clicks."
Each package sells for about $29, and can be used to file federal income taxes and "to file with the state for free," Lange said.
Electronic filing is a quick, easy and accurate alternative to traditional paper returns, and it isn't difficult to see why:
You receive your refund in about three weeks instead of the usual 10 weeks.
Your chance of getting an error notice is decreased. The programs prompt you when there's a discrepancy in the numbers.
You get proof, within 48 hours, that the Internal Revenue Service has accepted your return.
With advances in networks and the programs themselves, privacy and security are assured.
And if you don't feel like or trust yourself tackling the job yourself, many tax preparers will e-file your returns for you.
Thomas King, of H&R Block in Lawrence, acknowledges the growing number of personal tax-preparation programs, but notes that a professional can do more.
"A tax preparer can verify the government hasn't made a mistake this year or in previous years," he said.
There are several different categories of tax professionals, each with experience and expertise that can fill desired roles:
An enrolled agent provides tax assistance for estates, trusts, partnerships, corporations and other entities that are required to report taxes.
Certified public accountants are good if you have recently experienced major changes such as divorce, retirement, marriage or simply have an especially complex tax return.
Tax attorneys are well-informed with the nuances of tax law and its implications. While their fees are relatively high, such attorneys can litigate tax disputes and deal with estate planning.
But buyer beware. No matter who does the work, your name is printed on the return, and that means you are solely responsible for any false information provided to your tax preparer.
No comments
Commenting is turned off for this story.