Friday, April 11, 2008

Tax Time!

I admit it, I enjoy doing my taxes.

Of course it helps that I usually get a healthy refund due to itemized deductions. In addition, in my view, paying taxes is a basic civic duty. I must admit that in an era when people expect to have good schools, paved roads, and the resources to wage multi-theater wars—all while also demanding to pay no or less taxes—I figure that paying my rightful share of taxes is the least I can do for my country.

In any case, as a comic-book publisher, cartoonist and small business, I do derive a sense of accomplishment from organizing my financial records, calculating inventory, computing my income and expenses for the year, cross-checking my figures, and having it all balance out. If nothing else, tax time forces me to take stock of how I did the previous year (which I reported about for 2007 here).

Part of the fun is the software, which makes completing the forms and performing calculations easier and less labor-and-time intensive. In addition to using Quickbooks to track my business expenses (and Quicken for my business checking account), I rely greatly on tax preparation software.

For many years, I used TaxCut to prepare my taxes—I received a sample CD of the software in the mail years ago and, as the company no doubt intended, I kept using it in subsequent years. Not just due to familiarity but because it carried over my personal information from year to year. This year, however, I migrated to a Web-based preparation service called TaxACT. While it's a bit easier to navigate to a precise taxline item in TaxCut, I like the fact that TaxACT is an online application, meaning you can access it from any computer with Web access (there also is an installable desktop version that you can download or order on CD). All the information and data you input is saved online, and the completed tax forms can be downloaded as a PDF onto your desktop for mailing in, or simply e-filed online. (For some reason, I am resistant to e-filing my taxes and still mail in my tax forms. I have found that I still get my tax refund fairly quickly, in just a few weeks.) I plan to fully migrate to TaxACT next year.

After many years as a publisher/business owner, I now keep detailed notes and templates so that I don't have to reinvent the wheel each year, which has significantly reduced the time I need to spend preparing my taxes. This includes a spreadsheet I created that essentially mimics the Schedule C form for reporting business activity, which does all the math for me, including calculate my inventory. I also have created customized reports within QuickBooks that provide me with the correct figures I need that can be simply plugged into the required tax forms.

Anyone needing assistance in preparing their taxes as a comic-book publisher would do well to pick up any tax guide like J.K. Lasser's Your Income Tax 2008. Before I began using the software, I used to purchase one of these tax guides about every other year—having such a book at the start gave me a good basic foundation in preparing my taxes, and continued to serve as a useful reference in subsequent years. These books early on gave me a solid, basic foundation in personal and small business tax law, but changes in tax law can now be easily found online or are usually conveniently written into tax preparation programs!

Believe it or not, the IRS website also is considered a very well-designed site, where you can download all its forms (many are fillable), instructions, tax guides and also conduct searches. (By the way, I've heard others commend the IRS website, so that's not just personal opinion!)

Anyway, happy tax time to all!

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