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Tax time rolls around once per year. Although it seems like it happens way too often, all Americans are subject to being taxed on their income, and therefore most end up having to file a tax return in order to comply with legal requirements set forth by the federal government. To help out with preparing individual tax returns, many Americans take advantage of federal tax preparation software. However, are you paying too much in taxes if you use this type of software?

If you are concerned that the tax preparation software is not able to accurately figure your taxes in a way that saves you the most money, you may be correct. If you do not choose to use a tax prep software, then your other options are to prepare the taxes yourself, or hire a tax professional such as an accountant or a person who has been certified by a tax prep service.

The cold, hard facts are that it is the cheapest to prepare your taxes yourself. However, if you are not that knowledgeable about preparing a tax return and all  of the rules, regulations and possible deductions, then you may be doing yourself a disservice.

Purchasing tax preparation software is another option. For approximately fifty to seventy five dollars, you can purchase a software that will guide you through the process of preparing your tax return. You can be confident that this software will adequately prepare your tax return so that you will not be in danger of an audit. This is because these type of software packages are designed to address an general set of deductions that will apply to the majority of the population. This does not mean that the software will address every single deduction possible. Therefore, you may or may not be saving every penny that you could by using this type of software.

The decision to use tax preparation software should be prefaced by the fact that you may not be made aware of every single deduction that is available to you by relying on the software. The only solution to that pitfall is to have an experienced tax professional complete your taxes. Yet, there is no guarantee that he or she will find and apply any more deductions than what you are able to do with the software. In addition, a professional’s services can cost you 3 to 4 times more than the software’s cost, or even more.

Tax Tips for the Home-based Business Owner

One of the most important decisions you’ll make as a business owner is who you will choose to help you with your bookkeeping and accounting needs. Research accountants in your area and look for one that specializes in small business taxes. Ask if they will prepare both corporate and personal returns if needed. Make sure your accountant is clear on how they charge for their time – especially for questions over the phone.

Assistance available for income tax preparation

The IUN School of Business and Economics and the IUN Accounting and Business Student Organization, in cooperation with Northwest Indiana Community Action and the Internal Revenue Service, will assist low-income families with filing their tax returns through the VITA program.

Free money from the IRS?

If you know nothing of the Earned Income Tax Credit, now may be the time to learn. The 30-year-old EITC program will be offering tax credits—free money, that is—to workers who made less than $42,000 in 2008. For this tax season, the maximum credit is about $4,800. Among other requirements for the credit, you must be a US citizen and file a federal tax return.

Going Paperless This Tax Season

Oh tax season! It comes but once a year, and even that’s too much for most. There’s just no way of escaping the inevitability of having to gather your receipts, assess your income and expenditures, categorize your spending and struggle to figure it all out. Though we can’t make the dreaded tax day go away, you may be able to make the whole process a bit less stressful through e–filing.