Taxes seem to be a universally upsetting subject. Honestly, it doesn’t even have to be. Whether you prepare your taxes at home or bring them to an accountant or tax preparer, you should still be familiar with your local, state, and federal tax laws and regulations.
The Ugly Truth
Someone once said, “The only two certainties in life are death and taxes.” It sure hits the nail on the head. With as much as Americans stress over taxes, you would think the two are one in the same. On average each year almost 8 billion hours are spent preparing taxes. That’s over 900,000 years each year. Whether this tax preparation is done personally or by a CPA firm, the preparer must know all tax laws and regulations.
Why Would Anyone Prepare Taxes at Home?
If you’re part of a more complicated segment of society, you may opt not to do your own taxes. Businesses need to integrate their bookkeeping payroll service, their cash flow processes, their cash flow analysis, and all other business accounting into their tax returns. Oftentimes, this should be handled by a tax professional. For a more simple segment, such as those who work a typical, non – – ownership job in a company and have simple assets are able to simply do their taxes at home. Over 27 million people prepared their own taxes in 2014 and only 21% of those actually used a tax software. With the help of many specialized programs, tax preparation can be a breeze for anyone with knowledge of their own personal finance.
Payments and Refunds
Once the taxes are prepared, you get one of two outcomes: you pay them or they pay you. Simple, right? Almost 80% of American taxpayers get a refund each year. Of course, that’s after $140 billion is paid to the government by form of various taxes. Out of the large percentage of those who receive a refund, 30% pay debt with it, 28% invest the money, and 26% use the money for necessities. If you’re not in the top 10% of rich Americans and you have to pay, be grateful – – they pay 70% of federal income taxes.
To maximize your refund, you’re going to have to learn tax laws and regulations. You may not realize that moving for work can be written off or that fudging those expenses from last year can result in an audit. If you want to keep your nose clean, learn them, respect them, and abide to them. Once you do so, you may realize that taxes aren’t as scary as you thought.