Taxing time to file tax returns

Just think how many of your tax return forms end up being like this. Regardless of whether you use the fill in copy or the paper forms, a lot of effort goes into filing your returns and this image sort of symbolizes that. Around this time of year, the stress levels of a lot of people are pretty high for those who choose to file themselves and for those who avail the services of tax consultants to prepare and file their returns as well. For a variety of reasons.

For people who (like me) choose to file themselves they are always thinking about whether they have reported all their income correctly and whether they have benefited from all the deductions that are available to them. For the people who go to tax consultant for tax preparation and filing, they are anxious about the deductions shown in their returns and the amount they have to pay the tax consultants as fees and whether their returns will be audited or not.

I have been filing my tax return both here and in India (save for the past two years) by myself and have been getting good refunds every year. The tax preparation process is very simple and straight forward at least here in the US and if you can understand the "Saral" (which literally means simple) form & Form-16 (Statement of earning, similar to W2) that Indian Income tax office gives us, then understanding the form 1040 is no big deal. Believe me. For one, the form is legible and written in easy to understand language and every line is numbered and explained. In addition IRS provides line by line instructions on how and what to fill in the corresponding fields and provides very clear worksheets where calculations are required. The W2 is also very simple and easy to understand is the fields map one to one to form 1040.

Filing a tax retrun is not a rocket science though people do think that it is. All you need to understand the tax forms is some time & willingness to go through the instructions, carry out calculations in the worksheet and transfer the numbers back. All it takes is two hours. It is not that you have to do everything manually. There are some good software programs available out there which do all the number crunching and hardwork for you. I have tested both H&R Block TaxCut and TurboTax and both are very easy to use and understand. One word of caution though, if you have foreign tax credit like I do, then neither software is able to handle it automatically. You have to tell the software to do that using other forms.

A lot of my colleagues at my workplace use the services of tax consultants and end up paying a lot of money to them as fees. I have helped some of them to navigate through the forms and have even filled up their forms. Why, just yesterday one of my colleagues who was my manager in my previous assignment called me asking for tax advice. When I talk to my wife about this, she jokingly mentioned that I should start a cut rate tax consulting service. Now when I think of it, why not? If anyone has any problems in filing taxes or figuring out some numbers, please contact Mukul's cut rate tax service.