Everyone wants to get the biggest tax return possible. Often, tax payers agonize over the process of filing income tax returns. Changes to the tax code itself, life-altering events and more all have to be carefully considered each year at tax time.
Every tax payer needs to take some time to understand the whole tax process. After all, everyone pays taxes each year, and the best way to be effective during tax time is to arm yourself with knowledge. This knowledge can help determine The best tax preparation route for you.
The process of learning about filing income tax returns often starts with determining whether it will be more cost effective to prepare an income tax return yourself or to hire a tax professional. Instead of spending hours researching the various pros and cons of these options, it may be helpful to simple consider the complexity of your return.
Determining if a particular tax payer will be filing income tax returns which are ‘simple’ or ‘complex’ starts with answering two questions:
- Did said tax payer have a life altering event? The birth of a child, a marriage or a death means a change in what deductions and credits will apply.
- Does the tax payer qualify to ‘itemize,’ or list deductions, such as homeowners, parents, loan holders and those with more in deductions than the average automatic deduction amount?
Anyone who answered ‘yes’ to these two questions will be filing a more complex tax return than those who were able to say ‘no.’ It is these tax payers that should consider working with a tax professional. Their fee, which is often relatively small, is an investment in a greater tax return.
In the alternative, single, non-homeowners who do not itemize may choose to file their own return via an online service.
Filing income tax returns can be simplified by taking the time to ask yourself a few questions and determine the best filing route for you.