So you want to use a spreadsheet for taxes? Or do you want to do it the other way around? Which is better, the spreadsheet or the manual?
Tax time can be stressful enough without adding the stress of having to figure out taxes for every single expense on your income statement. Having to do it manually is an even bigger headache that just trying to get your head around everything on a blank sheet of paper.
As a professional with years of experience in the tax return and accounting field, I think the better approach is using a spreadsheet. At least when it comes to taxes.
Firstly, it’s a good idea to start with the basics. You will need to create a tax schedule. A tax schedule is simply a spreadsheet that lists all your income and expenses as well as showing you what deductions you may be eligible for.
Before you dive into any complex math issues, like multiplying and dividing, it’s a good idea to spend some time getting your head around the basics of a tax return. Spend some time being familiar with the IRS forms, figuring out what you have to do, what deductions you can claim and how much you will have to pay.
For many people, they spend more time than necessary at the tax preparation table and they don’t see the point in doing all that extra work when there are so many different reasons why a person might have to do it. The best method is to spend enough time at the table so that you know what you should be paying.
Many people who are not in the habit of preparing a tax return also find that if they just go back and do it all over again they’ll have an easier time of it. So you are not rushing your way through the process, your mind is focusing on doing the simplest thing first.
So try to follow this simple rule: if you are going to be taxing your income, find a spreadsheet that can allow you to file a tax return. If you’re going to be filling out your own tax returns, make sure that you have at least one spreadsheet to hand for each person that you need to pay. If you’re going to be doing the bulk of your income tax filing online, make sure you have a spreadsheet for you to actually do your taxes on.