Tax preparation is the process of preparing tax returns to be filed with the IRS and/or state, depending on which returns need to be filed. Most tax preparation for both individuals and businesses is done by a professional tax preparer for a reasonable fee.
Tax preparation may be done by the taxpayer with or without the help of a professional, tax preparation software, or online filing services. Tax preparation may also be done by a licensed professional such as an attorney, certified public accountant (CPA), enrolled agent (EA), or by an unlicensed tax preparation business. Because income tax laws in the United States are considered to be considerably complicated, under some scenarios, taxpayers seek outside assistance with tax preparation.
In some states, licensing requirements exist for anyone who is involved with tax preparation for a fee – in many cases, this pertains simply to the individual state’s filing requirements.
Below are just some of the ways you can accomplish successful tax preparation with the IRS and your state:
Filing a Paper Tax Return
The IRS no longer distributes tax packages, however, you can still file your tax return on paper through the mail. The processing time and chances for an error increase when you mail your return because data entry technician must enter it into the IRS computer system before processing.
Electronic Tax Filing
IRS e-file is the electronic transmission of your tax return to the IRS. Many software packages and service providers allow free electronic filing of federal or state returns for all customers who pay for tax preparation. For a fee, some services may e-file a tax return that you prepared yourself. This is called a Transmit-Only Return.
Just remember, you must have a valid tax identification number, such as a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), for every person included on the return to qualify for electronic filing.
When to File
Generally speaking, mid-January is when the IRS will begin accepting and processing tax returns for the upcoming tax season. April 15 is generally the due date for most taxpayers to file their income tax returns. It’s important to start your tax preparation early!
Your paper tax return is considered filed on time if it is mailed in an envelope that is properly addressed and postmarked by the due date. If you send your return by registered mail, the date of the registration is the postmark date. The registration is evidence that the return was delivered and your tax preparation timing was successful. If you send a return by certified mail and have your receipt postmarked by a postal employee, the date on the receipt is the postmark date. The postmarked certified mail receipt is evidence that the return was delivered. That’s why it’s important that you work with a credible and timely tax preparation firm.
If you use a private delivery service designated by the IRS to send your tax return, the postmark date generally is the date the private delivery service records in its database or marks on the mailing label. The private delivery service can tell you how to obtain written proof of this date.
e-Filed Tax Returns
If you e-file as your preferred method of tax preparation, your tax return is considered filed on time if the authorized electronic return transmitter postmarks the transmission by the due date. The electronic postmark is a record of when the authorized electronic return transmitter received the transmission of your electronically filed return on its host system. The date and time in your time zone controls whether your electronically filed return is timely.
If you do not complete your tax preparation on time or file your return by the due date, you may be subject to a failure-to-file penalty and interest. To avoid penalties and interest, it is recommended that you file for an extension by April 15.
If you are due a refund, but you did not file a tax return, you must file within three years from the date the return was originally due to obtain that refund.
All of the above are tax preparation solutions that Cloud Tax Team is more than happy to assist you with. In fact, we have an entire team strictly devoted to tax preparation as their core function. So, if you have found yourself in a hardship situation, have back tax returns that have gone unfiled, or an IRS collection action has been initiated against you, we are here to help.
Let Cloud Tax Team Help
Our professionals will put your mind at ease.