The Stress of Income Tax Preparation
For many people, tax preparation is neither easy nor stress free. We prepare taxes
the same way as most qualified and well trained preparers. We also try to make the process easier
on you. We try to take the stress away by helping you throughout the
year to be ready for Tax Day. We provide a range of services -- from free reminders that
can prepare you for a fast and straightforward filing to complete bookkeeping and record keeping services. It is up to you, and you have alternatives.
Whether you prepare your taxes or have them prepared by a professional, there are ways to make the
process more bearable. If you have a single source of income under $40,000 and no deductions,
you may find it easiest to file your federal return directly with the
IRS online's IRS e-file
(choose 'online e-file for individuals').
If you have more complex filings and choose to do it yourself, there are many options.
You can file on-line with Intuit's
TurboTax or H&R Block's
At Home. You can buy these companies' software products or others
such as TaxACT.
However, you may choose to turn this work over to someone else. Perhaps you never had
a thing for "running the numbers" or maybe you just do not have the time. Either way, being
faced with something that you really do not want to do is more than annoying, especially when
the consequences can be so taxing.
There is a lot you can do to prepare for tax filing in order to make it less stressful. The hardest
and most costly part of tax filing may be reviewing and understanding your finances
in order to report everything that is relevant. If you have every financial
transaction of your life recorded, debited/credited, and balanced, your tax filing
would be reduced to a series of decisions regarding the tax regulations as they
applied to your activities. Very few people are so obsessively/compulsively
accounting oriented, but if so then they usually breeze through the filing process.
At the other extreme are those who have no clue about what they earned or spent.
Tax preparation for these filers is harder than a treasure hunt and far less
satisfying. If you have the discipline, buy a bookkeeping package such as
Intuit's Quicken, Quickbooks,
or Microsoft's
Money. If you then choose to self-file, their tax preparation software
can import their bookkeeping files to reduce your filing effort. They also
provide a way to manage your budget, which can help you beyond tax season. If you prefer not to do this yourself, we provide this
service.
Lastly and most importantly, using a tax professional to file means having a tax
professional in your audit. We stand behind our work. While online or
software tax filers guarantee their accuracy, their name does not go on the return
and they probably do not stand beside you in an audit. Unlike court, a federal
tax audit is one of the few places in our justice system where you must prove your
innocence. Do you really want to be your own council under those conditions?
How Did We Get Here?
America was not founded on taxation of its people. Most of the early 'taxes' were
tariffs on produce such as tobacco, sugar, and liquor. There was also a tax on slaves.
Income taxes did not begin until the Civil War, and those only lasted a decade.
It was not until 1913 that the 16th Amendment made income tax an established institution
of our federal government. In 1913, the top rate was 7% on married couples making
over $500,000 (about $11 million today). By 1918, the top rate was 77% on income over $1 million.
Ever since the 16th Amendment, laws regarding income tax have been expanded and
redefined. The tax rates have been changed dozens of times in less than a century and are used not
only to generate revenue but to shape the country's economic policy. As a result,
current tax law is some of the most complex and deliberately vague legislation ever
written. It's vagueness is deliberate, as anything specific can more easily be circumvented.
Much tax law is actually case law, determined by US Tax Court's 19 judges. Every
year it gets more complicated and stressful.