3 Federal Income Tax Rules to Live By
For many Americans the Tax return deadline is dreaded and stressed about. According to Pew Research poll conducted last year, 72% of Americans surveys felt bothered either ‘a lot’ or ‘some’ by the complexity of the U.S. tax code.
If you live by a few extremely simple federal income tax rules you will find the tax period a lot simpler.
1. Never do your taxes by hand.
One of the best things you can do when it comes to your taxes is putting down your pencil and preparing your taxes using tax software of a tax preparation accountant. Tax preparation software involves A LOT of guessing and requires a heavy effort load to work through the addition and subtractions that could lead to a critical error on your tax return, so if uncertain it’s better to be safe than sorry and speak to an accounting professional.
2. Keep good records
A common mistake for the average tax filer is thinking good book keeping is only useful for when your being audited. Indeed it is. However, the fact that good book keeping methods could also provide bigger discounts that you may otherwise be aware of is normally overlooked.
3. File on time
Failing to file your tax return on time can come with penalties and unneeded stress. If you’re self-employed, penalties can be particularly painful, even when you’re owed money. If you fail to file a tax return as a self-employed person for a given period you’ll stop receiving Social Security credits towards your retirement, which could adversely impact your Social Security benefit once you retire.