Home » Business

Your Easy Guide To Decoding Tax Forms

Dec 14, 2007
The trouble for many people and most businesses dealing with tax forms is not remembering to pay taxes before the deadline, but rather how to understand these confusing forms. In truth, these forms weren't designed with the everyday person in mind. However, things are changing for the better and more people are getting the help they need as they try to understand the forms in front of them.

When you are sure of what to do with tax forms, you will be able to fill out the form accurately, calculate the proper taxes you owe, calculate the proper tax refund and avoid getting audited. There are literally hundreds of potential tax forms, however, so it might be difficult to decide which form is for you.

The basic personal federal tax forms that you might find include the 1040EZ, a form for those that don't have any deductions or unique additions to their taxes;the 1040, used when someone does have deductions; the 1040A, required for certain instances where tips or other added income needs to be recorded; And, the 1040ES, the form needed to calculate estimated taxes.

But if you're having trouble understanding what to do with these tax forms when you get them, try to relax and not rush. When you are trying to meet the April 15th cut-off, not only are instructions going to not make sense, but you will also make more mistakes. A lot of times, the people who have trouble figuring out how to fill out their taxes are confused because they skip a step or they don't understand what the instructions are telling them to do. Take some time to read everything throughly first before you do anything.

Having a friend help you is also a good way to understand tax forms. Sometimes you just need someone else there to help you reason through the steps of the process. Also, if they have filled out more difficult tax forms before, they might be able to show you a better way of doing things. And, if all else fails, there are many professionals you can find to help you know what the instructions are telling you.

You can also find informative help by calling the IRS or going to their website. The IRS has created a user friendly and comprehensive site that you can check out at any time of the day or night. You can even send questions or read the frequently asked questions sections to get most questions about tax forms answered.

Also, be sure to get the related packet that goes along with your tax forms. With each tax form, the IRS prints out a related booklet to be used as a guide. When you are picking up your forms at the library or printing them from online, you need to make sure you are getting a copy of that booklet too.

When all else fails and it feels like you will never be able to comprehend tax forms, put them aside and take a break. It is probably going to make more sense when you come back to it. Sometimes you just have to get away from the taxes for a time before you can truly understand what they are trying to say on the tax forms.
About the Author
Craig Chambers is a tax and financial planner who enjoys sharing tips on tax forms and offers extensive free tax guides, and a free "special report" on taxes. Plus you can download the author's new tax guide handbook on his website www.taxesandtax.com
Rating:
Please Rate:
(Average: Not rated)
Views: 137
Print Email Report Share
Article Categories