EZ or Long Form: Know What to Do When You Have a Complicated Return
Tax Day may only come around once a year but it can be a very complicated affair! So how do you know if you can cope with on your own or if the time has come to hire a professional for complicated tax matters?
Aside from the fact that there seems to be more and more paperwork involved in filing tax returns as each year passes, your situation and circumstances are as ever changing as the tax laws themselves and so it’s very difficult for most people to keep on top of. There’s also the looming threat of significant penalties if you file late or exclude any relevant detail that could be construed as misleading and it can soon become a stressful event that gives you sleepless nights.
The Short Form vs the Long Form
As you’re probably aware, there are two types of tax returns you can choose from. The more simple short form, the 1040-EZ and the long form, the 1040-A. The short form is really ideal for people with a simple tax obligation and no significant requirement for tax breaks. You need to have an annual income of under $100,000 and less than $1,500 in interest revenue to be able to use the EZ form. Also, as the name implies there is less room to provide detail on the short forms and if you have experienced a significant change in circumstances or have a complex tax situation, it may not be the right form to choose.
The long form is the better option for those who have been through big changes in the calendar year that have impacted their tax position. There is more space on the long form to allow you to write off state sales taxes, medical expenses and any charitable contributions you have made through the year. There is also plenty of room on the long form to detail your tax credits and your completed Scheduled A has a detailed itemization of your tax deductions.
When to Consider Calling in the Tax Professionals
Perhaps you have experienced a major life event such as losing your job or going through a divorce, selling a home or receiving an inheritance. All of those events have a tax obligation and you know what that means; more responsibility to report on your earning and spending behavior through the year.
With the inevitable array of forms to choose from, how confident do you feel about calculating your own deductions, particularly in the aftermath of a significant change of lifestyle? Perhaps you have received a notification from the IRS about an income tax issue that you don’t fully understand? There are many reasons and positive benefits to placing the burden of responsibility for your tax filing on the shoulders of a tax professional.
How Hiring a Tax Expert can save you Money and a Whole Load of Hassle Too!
As you go through the twists and turns of life, you never really know what to expect of the future. It’s an unfortunate fact that marriages fail, people pass away and jobs are lost and the changes these events create in peoples’ lives extends way beyond matters of personal taxation. Removing the responsibility of filing your own taxes and placing in firmly in the hands of a trusted tax professional can give you peace of mind all year around so that Tax Day never bothers you again.