Tax season is here. To reduce the stress and make individual tax filing easier here are some simple steps you can take.
Easy Tax Filing Step 1 – Gather the Tax Forms You’ll Need
Save time by gathering all the tax forms you’ll need before you start. If you’re an employee you’ll need a W2 form, one for each job you’ve had over the last year. You may also have various Form 1099s which document income from dividends, earned interest, Social Security benefits, contract work, and more. Other possibilities include form 1095A, which is necessary if you purchased health care coverage from a government marketplace, or form 1098s for mortgage interest, tuition payments, or student loan interest payments. Maybe you even need a Form W-G to report gambling winnings. In the past these forms would have been mailed to you, but you may receive some electronically. You should have received your forms by the end of January, so if one or more hasn’t shown up, contact the organization and inquire about its status. Don’t forget, you’ll also need a copy of last year’s tax return.
Easy Tax Filing Step 2 – Collect & Organize Receipts and Supporting Documents
Collecting and organizing receipts throughout the year makes it easy to retrieve them at tax time. If you plan to itemize deductions on your personal returns, you need records of medical costs not covered by insurance, property tax records, bank and credit card statements, job- or investment-related expenses, and receipts for charitable contributions over a certain amount. Storing receipts doesn’t need to be complicated, so do what works for you. if color coding helps you stay organized, keep all the receipts for your home improvement projects in a green file, while you put receipts for your vacation home improvements in a yellow file. If you tend to lose papers, the IRS will accept digital receipts for tax purposes. Capture them immediately by scanning or taking a photo of them with your smartphone. Just be sure you back everything up.
Easy Tax Filing Step 3 – Pay Electronically
Taxpayers who file electronically get their refunds the fastest, often within 2-3 weeks of the return being received by the IRS. It helps if you set up your refund for direct deposit so it can go straight into your bank account. E-file also makes compliance with reporting and disclosure requirements easier by eliminating the need to make copies, assemble all of the appropriate schedules and attachments. Added bonus – you don’t have to pay for postage.
Easy Tax Filing Step 4 – Start Early
The best choice is to file taxes as soon as you can. If you’re getting a refund, it’ll arrive sooner. If you owe money, an early return will give you more time to save, since taxes owed aren’t due until April 15. Filing early also eliminates the need to drag the entire process out with an extension. Most people get extensions simply because they started late and didn’t have enough time to complete the process before the tax deadline. One risk of this approach, if you file an extension and you end up owing money, you need to pay the balance due by April 15 or the IRS will charge interest and penalties on the outstanding tax debt until it is paid in full.
Easy Tax Filing Step 5 – Work with a Reputable Tax Preparer
Your tax preparer has access to your most personal information. They know about your marriage, your income, your children, and your social security numbers – all the details of your financial life. So, it’s important to work with someone you trust, who is experienced and credentialed. It should also be someone affiliated with a reputable firm who’s available all year round. Steer clear of tax preparers who set up in empty retail space at the height of tax season.
If you have questions about your taxes, call Hare CPA. We are a community-focused and reputable CPA and advisory firm with a long track record of helping individuals and businesses navigate the tax code. We’re ready to help you make tax filing easy.