1. Be Careful and Thorough. Avoid common problems like illegible hand writing, mathematical errors, transposition of numbers, and missing signature. These little oversights can end up costing you time and money if you are slapped with penalties.
2. Get Organized. Allow enough time to get your “stuff” in order. For example, properly categorizing your expenditures now will save you a lot of time later. Come tax time, you will be glad you grouped your expenditures by category (match it with verbiage on Schedule C if self-employed) and not by month or name of vendor payee.
3. ?Be Flexible. Timing your cash flow can save you money. ?In other words, always accelerate deductions in the year you are doing taxes for and always defer income, if you can, into the next year, thereby lowering your current year’s tax bite. ?If you fall into the Alternative Minimum Tax, you may want a professional to advise you.
4. ?Know When To Ask for Help. Tax preparation tools like TurboTax and TaxCut are great, but people with anything more than a straight W-2 (including anyone with even the smallest business ?Schedule C”) should be aware of the limitations of these software programs.
5. Don’t be Penny Wise and Pound Foolish. Hiring an expert CPA or EA to prepare your return is a small annual investment that can pay off big! Don’t do your taxes yourself unless you are a straight W-2 wage earner that takes the Standard Deductions (in other words, someone who doesn’t itemize or have any unreimbursed employee business expenses).