Doing Your Own 1040?
Updated: Jan 18
Some people can do their own tax return, especially if they only have some W-2s and 1099s. But if you have your own business or real estate rentals or many stock and option trades, you need a professional tax preparer.
You don't want to receive a letter like the one to the right. A CP2000 from IRS that tells you how much more you owe in tax because IRS received evidence of income that you did not report.
By trying to save a $100 to $200 it will cost him over $1400 in penalties and interest.
The guys below thought they were pretty good carpenters and tried to "do it themselves" ... (from "Do It Yourself Fails" on Pinterest)
Just a few steps off can be disastrous ... and cost a LOT of money to fix.
Several tips if you still want to do it yourself:
Use prior year's return as this year's Organizer, if something is not there this year make sure you know why.
Perhaps lay out the amounts on an Excel spreadsheet so that you know you have captured all your income and tie your 1040 Total Income to the spreadsheet. IRS has a pretty good track record for finding unreported income that you simply forgot about.
Don't wait until the last minute. Prepare you spreadsheet, familiarize yourself with the proper forms, complete it, then let it sit. Come back and review it the following week.