Money Guide Preparing Your Own Tax Returns Great Ideas Collection
Ken Jennings' long reign as champ on the TV quiz show "Jeopardy!" ended when he could not identify the company with the largest number of seasonal white-collar workers (it was, of course, a well-known tax preparation firm). Mr. Jennings says he did not know the correct response because he does his own taxes.

The main advantage gained by preparing your tax returns is not from saving the preparation fees, although this can be significant. Rather, it is the deeper understanding you gain of your personal financial situation and, in particular, the impact of taxes on it.

Preparing your own tax returns should be a relatively straightforward affair if:
  • You are an employee rather than a business owner.
  • Your investments are basic financial instruments like stocks, bonds, mutual funds, and bank accounts, with nothing exotic.
  • You do not engage in complicated real estate transactions.
  • You are an organized person who can keep the required documents and receipts in good order.
If your situation is simple, as outlined above, the instruction booklets that come with your tax returns (both federal and state) normally are more than adequate guides. Nonetheless, before making your first foray into doing it yourself, you should consider:
  • Attending a course on tax preparation. See what your local community college offers in its evening adult education program.
  • Getting a private tutorial from someone experienced in tax preparation, preferably a professional such as a CPA (Certified Public Accountant).
  • Reading books on the subject.
Any student attending a college offering business courses should consider taking one in tax law. The information gained therein will prove invaluable.

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Topic contents Mark Kolakowski and CliqueFriends, LLC, 2004
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