Ensuring A Hassle-Free Tax Return
There's really nothing fun about preparing a tax return. In fact, it's a task famously associated with procrastination, late deadlines, and headache. While it's unlikely to be anyone's favorite hobby, it doesn't actually have to be the hassle it becomes for so many people. Taking a few simple measures can make it if not a pleasant, at least a worry- and hassle-free experience.
The most important thing is to start early. Aim to be finished several weeks before the deadline. That way, if something goes wrong — such as needing to track down additional information or fill out extra forms — you'll have plenty of time to get it done. If you're working with an accountant or tax-consulting firm, starting early can help you beat the crowd that typically accompanies the blisteringly hot tax season that drives many such professionals' businesses.
Preparing your form with the help of a professional can be a big help. The tax code changes every year, and whether it's good news or bad news, you'll want to know sooner than rather later. You may be eligible for tax benefits you were unaware of, or subject to tax liabilities you didn't expect. Either way, it shouldn't be a surprise.
Working with an accountant or tax-consulting firm well before the tax season carries its own benefits. These professionals can help you arrange your finances in ways that will reduce your tax liability. For example, the conventional wisdom is that paying off your home loan as quickly as possible is the smart way to go, and to some extent this is true. The interest accrued over the course of a home loan can be staggering. What's often surprising is that for some people it makes more sense to take a couple more years to pay off a loan, as it keeps them out of a higher tax bracket.
Also essential is honesty and full disclosure. When you sign your tax return form you are signing a legally binding document. They're not kidding when they say on the bottom that you're committing perjury by knowingly miss-reporting your assets and income. What seems like an innocent white lie at the time can invite an audit or worse in the future. So start early, be honest, consult a professional, and relax while everyone else is rushing to the post office next April.