Tax preparation is basically the procedure of preparing tax documents, typically income tax forms, for an individual other than the original taxpayer, and in general for compensation received. Tax preparation can also be performed by the taxpayer alone with or without the assistance of tax preparation services and online resources. The Internal Revenue Service (IRS) issues many publications related to tax preparations, which taxpayers should refer to for help in preparing their financial records. An individual’s financial records, such as tax debts, are confidential and privileged, and cannot be shared without permission from the taxpayer. Have a look at Elgin Tax Preparation for more info on this.
To file an income tax return, the individual must complete an application for a federal tax return, called Schedule C. To do this, the individual must use the electronic filing system called e-file. There are several types of federal tax return forms available, including the social security form, which is used mainly for payroll and Medicare. A social security tax return must be filed on or before the due date, usually five months after the end of the year for which it is prepared. A Medicare tax return must be filed on or before the final day for filing, which is generally five calendar days following the month in which the Medicare or Social Security income tax is received.
In addition to the federal tax return, there are state tax forms available from the IRS. Some states also have their own forms, and most states use the same tax preparation software as the federal system. The use of tax preparation software to file state tax forms is not recommended, as such filing often times involves complicated calculations that many people do not have enough experience doing on their own. In many cases, a certified public accountant can make these calculations automatically, taking away any guesswork from the tax return preparation process.