Tax season is upon us and accountants are flooded with receipts. If you do your own taxes you are probably collecting all of your documents and W-2s so you can file soon. I recently read an article on Forbes about how to file your taxes on the cheap and it mentions the various computer-based programs that are available to you.
If your parents are still claiming you then you probably won’t be filing and claiming deductions, but it would still be good for you to start learning how to prepare your tax returns for once you do start to claim yourself.
How to Handle Investments
As an investor, you will need several statements when you begin to file your taxes. Your brokerage should give you a form that will summarize your buys and sells for that year. If you traded stocks in an IRA then you won’t get your final forms until after April since you have until April of the current year to contribute to your IRA for the present year.
How to Handle Business Income
If you began a business this year or worked as a 1099 employee then you will definitely need the help of a professional tax preparer to make sure that you get all of the deductions you are entitled to. I like to use TurboTax.com, it pulls in all of my information from the previous year and guides me step by step through all of the deductions and credits I am entitled to. Even if you only worked at a pizza delivery boy, you may be able to deduct the cost of maintaining your car. Tax credits for each year are updated in the newest version of TurboTax.
Looking for more help? Visit The Ultimate Tax Guide for Young Adults to answer your tax questions.
For next tax year, begin saving all of your receipts and writing down your mileage and where you were going. You would be surprised at how many deductions apply to small businesses and 1099 independent contractors. See Pub 1799 for Independent Contractor and Pub 334 for Tax Guide for Small Business. If you decide to do your taxes on your own you should visit IRS.gov and research the forms you will need. They will mail you any IRS publications you will need free of charge.
How do you do your taxes? Do you use tax software or hire an accountant?