(ARA) – Stressed out about your tax return? For some taxpayers, the motivation to file early is the promise of receiving a big tax refund from Uncle Sam. For others, tax time and procrastination go hand-in-hand. This tax season, however, procrastination may have been fueled by necessity as this Tax Year 2006 (TY06) has plagued taxpayers with extraordinary challenges — one after another.
First, after months of delays, Congress signed into law on December 20, 2006 the Tax Relief and Health Care Act of 2006.
Thankfully, this law extended several soon-to-expire tax breaks (i.e. credits and deductions for education tuition and expenses, teachers’ out-of-pocket costs for classroom materials as well as state and local sales tax). Nonetheless, these tax breaks were extended well after the Internal Revenue Service (IRS) printed its forms and instructions. The Translation? Confusion. Taxpayers will spend a fair amount of time trying to figure out how to claim the deductions and credits that don’t appear on Form 1040.
Next, the IRS changed the due date for tax returns from April 16 to April 17. Of course, it’s doubtful that many taxpayers will throw their arms up in protest over gaining an extra day to file their taxes.
And, let’s not forget that many of the largest brokerage houses needed to ask the IRS for permission to mail out their 1099’s a little later than January 31 due to a new reporting requirement which also became law last year. (The 1099 form series provides the information taxpayers need to report their investments.)
To be sure, most 1099 mailing delays were short and most certainly helped to reduce the number of tax returns that would have been submitted with inaccurate financial information. Nevertheless, taxpayers with interest and dividend income will need to be mindful of the forms they reference when reporting their income to the IRS. Helpful hint: A 1099 form that has been revised will have an ‘X’ in the ‘Corrected Box’ at the top of the form.
Now that the April deadline is just around the corner — it’s time to bite the bullet and organize your tax information in order and prepare to file your return. Unfortunately, preparing a tax return can seem like a complex homework assignment.
‘Not only do tax software and online preparation services offer do-it-yourself tax preparers the ability to stop and come back to the return they have begun to prepare, software also allows its users to work on any part of their return — making it possible to prepare their taxes in stages,’ says Stephanie Behrends, spokeswoman for 2nd Story Software, Inc., makers of the popular TaxACT tax preparation software and Web-based services.
Behrends continues, ‘TaxACT, for example, automatically performs all necessary calculations and adjustments to previous entries when new financial information is entered.’
Knowing which credits and deductions are available to you (and how to claim that tax benefit) may be anything but intuitive this tax season. If you are among the 20 million taxpayers who continue to file your return manually, tax software may be the antidote necessary to simplify the process of filing your tax return — while helping to ensure you maximize every deduction available to you.
Are you thinking about using tax software to file your taxes — helping you to conserve time, save money and avoid making costly mistakes? Still have questions about e-file? Visit www.IRS.gov/efile/. More information regarding TaxACT may be found by visiting www.TaxACT.com.
Courtesy of ARAcontent