The Huntsville Item, Huntsville, TX

Local News

March 29, 2006

Avoid tax prep headaches: Get organized

With April 18 just a few weeks away, local tax return preparation businesses are as busy as ever.

While they do a great deal in preparing and filing tax returns for individuals and businesses, there are a few things people can do to make the process go faster, which gets a refund returned faster.

Mary Novark, who runs Novark Business Solutions, said the best thing people can do when filing taxes is to be organized with their information.

“Being organized is No. 1,” Novark said. “When people come in here, depending on what business they run, I draw up a form for them to itemize all their monthly expenses.”

Once that form is complete, it is much easier for her to itemize individual expenses and determine what needs to go where.

“You get your money back a lot quicker, number one, and number two, you don’t have temporary personnel working on your return. It’s all electronic,” Novark said.

Most businesses who offer tax return preparation use an e-file service, which submits information to the IRS electronically and speeds up the process. According to the IRS, the number of people choosing to e-file, either from their home or from a tax preparation service, continues to increase, going from 25,000 in 1986 to 63 million in 2004. 42 million of those choosing to e-file in 2004 did so through a tax professional.

Diana Hunziker, who runs Diana Hunziker Business and Tax Solutions, said people really need to be aware of the laws, especially when it comes to what can and cannot be deducted.

“2005 was the last year, unless Congress revises it, for the law that says they could take tuition deduction,” she said. “Also, if pay their 2006 property taxes before December 31, they may double up tax deductions for next year’s taxes.”

While people are able to itemize sales tax deductions, Hunziker believes that unless something major like a house or a car, it is usually better for individuals to use the formula provided by the IRS.

Both Hunziker and Novark said one of the greatest benefits to using a service like theirs over filing from the home, is that they know what the laws are and what can be deducted.

For example, taxpayers may deduct tax preparation services, child care through day care, money gained through selling a house (up to $500,000 if married or $250,000 if single), moving costs related to job-related moves of 50 miles or more, as well as many other expenses they might not even think of.

“You can take mileage on charitable work and a lot of people don’t know that,” Novark said. “You can even take mileage on medical expenses.”

The fact that there are so many different things that can be deducted for so many reasons can make a tax preparation service beneficial. Novark said when it comes down to it, the best thing any taxpayer can do for him or herself is simply to educate themselves on the issue.

“Don’t wait until the last minute to educate yourself,” Novark said.

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