All About Tax Products

Okay – you've heard the old adage a million times, “Nothing is certain but death and taxes”, but how apropos! The best news is that online tax filing sites improve constantly.

Online Tax Filing products walk you through the income and expense reporting for both federal and state taxes. Your answers are calculated and automatically placed into the correct forms fitting your required needs. The bonus parts of this are they double check for errors PLUS make tax saving suggestions!

You then print your return and/or file it electronically. Want to hear more great news? Tax return electronic filing is less expensive in some cases. But be careful - state often has additional filing charges and would you believe - sometimes more expensive than federal!

About the Taxpayer Advocate Service

The Taxpayer Advocate Service is one of many IRS tax programs offered to taxpayers. It is an independent system to help taxpayers resolve problems with their federal taxes, IRS tax forms, and other tax-related matters that, for whatever reason, have not yet been resolved through the normal channels. If you qualify to receive help through the Taxpayer Advocate Service, you will be assigned a case advocate, who will help you address your concerns. Some of the things a case advocate might do include reviewing your problem, giving you the name and phone number of the person assigned to your case, and give you updates on progress and time-frames for resolution of your problem. You can find out more about the Taxpayer Advocate Service by visiting the IRS' Web site.

Where to Find Tax Help

There are a number of places you can get help preparing your federal taxes. The IRS tax help service is available online at the IRS' Web site. It offers topic-specific information in the form of a FAQ list as well as more in-depth fact sheets on topics commonly asked about. You can also hear pre-recorded information on many of these same topics by calling TeleTax at 1-800-829-4477. If you don't feel like wading through the telephone menus at TeleTax, individual tax filers can call IRS customer service at 1-800-829-3676. Business filers should call 1-800-829-4933. TTY/TDD callers can reach IRS customer service at 1-800-829-4059. Finally, if you're using one of the popular do-it-yourself tax programs, those offer a wealth of information under the “Help” tab, and screen-specific help pops up as you work on your return. Just remember to check for updates to ensure you have the latest, greatest information before you begin plugging in your numbers. You can also hire a tax professional to prepare your taxes. For qualified tax professionals in your area, check the business listings in your phone book.

Keep it Simple

When it comes to taxes, simple is better. Finding the simplest forms for your situation are advisable, because making a mistake that could cost you a delay in processing your taxes and any due refunds. The Federal Tax Return Preparation form that is the simplest is 1040EZ. Form 1040A has additional items not covered in the EZ. Use Form 1040 when you itemize deductions and report complicated investments and other income. Note: The income limit for Forms 1040EZ and 1040A has increased to taxable income of less than $100,000.

Overview of Tax Preparation and Filing Process

To prepare for the final income tax return filing of your return, there is a process that happens. Hopefully, to ease your year-end frustrations, your income tax process has been yearlong. You have been maintaining the appropriate logs, recording your expenses and income properly, and doing monthly bank reconciliations. If not, it is never too early to start for next tax year. First, you receive your income documents before January 31, 2007. Regardless of whether you work as an employee or are self-employed, there is a January 31, 2007 deadline for issuing these documents to you. If you do not receive them by this date, call the IRS. They can help you obtain this form.

Employees will receive a form W-2. Known as Withholding Allowance, these tax forms will be mailed to you by your employer. And, if you worked for more than one employer, you will have more than one W-2 to file along with your 2006 income tax return. You will send the Federal copy of your W-2 along with your 2006 income tax return. If you are self-employed, you will receive the IRS Form 1099 for various reasons. The only time you will receive these forms, however, is when an entity or individual paid you any money during 2006. These income reporting tax forms need to be mailed to you by anyone who paid you money and did not withhold any income taxes. For instance, your client will send you a 1099-MISC for the job you completed that cost them $2,000. If you are not self-employed, you may also receive a 1099. For instance, your bank will mail you a 1099-I for interest paid on your savings account. If you received any dividends from your stock, you will receive a 1099.

The first step, therefore, in your income tax return filing process will involve gathering all your tax documents together. Have all your income documents ready. Get all your receipts, cancelled checks, and bank statements together. You want to verify the amounts you paid to see what expenses you can claim and possibly deduct on your income tax return. Go through your checkbook for 2006 and be sure you catch everything that you paid and can deduct. Hopefully, you included an explanation for applicable expenses. That makes it easier come tax time.

Secondly, get a hold of any tax forms, publications, schedules, and instructions you need in order to file your income tax. These can usually be obtained from the IRS via various methods (online, in person, local sites).

Third, fill in your income tax return. Or, take it to a tax preparer for double-checking and submission.

Fourth, double-check your return for mathematical errors, or missing information. Be sure every applicable line has something on it.

Fifth, sign and date your return. If filing jointly, be sure your spouse has signed the tax return. Last, if mailing your return, attach all documents. This includes your W-2. Staple them. Do not use a paper clip or leave them unattached. Do not forget to include your tax payment, if you owe any 2006 taxes. Put in envelope, attach postage, and mail.

H&R Block Tip: If filing electronically, have all the information available to transfer over into your e-file return. Find a computer. Find a suitable service provider who charges a reasonable fee (or free). Then, the software will take you step-by-step into the income tax return filing process. Then...take a deep breath and relax.