Tax season is upon us once again! There is barely one month left until taxes are due. Did you know that 7 million taxpayers don’t properly file their taxes? Don’t let that be you! Filing late and improperly filing your taxes can bring penalties and more stress down the road (you can end up paying 17% extra on late taxes). The sooner you begin to prepare your taxes, the better. You can even begin to prepare to file your taxes today. Below are three things that every savvy taxpayer does to prepare themselves to file their taxes.
Decide How You’re Going to File
Do you want to file yourself or do you want to have someone help you out? If you are going to do your taxes yourself, do you have a software that you prefer? There are plenty of online resources to help you file your taxes. Turbotax, H&R Block, E-file, TaxSlayer, TaxAct, and more. You can even file your taxes on paper, if you’d like. If you’re not the DIY type, find someone that you trust to help you file your taxes. An expert may be just want you need in order to maximize your refund. There are hundreds of options for tax professionals as well. Don’t just go for the cheapest price, as they may be inexperienced. Find someone who knows the ins and outs of tax law and who you can trust to help you file your taxes.
Whatever method you choose to use to file your taxes, you need to organize yourself before you begin. Gather necessary forms, receipts, charitable records, etc. Jot down your personal information such as social security numbers, addresses of your real estate, dates of moves, etc. Grab your tax returns from last year, W-2, 1099s, 1098s, W-2Gs if you have any gambling winnings, Schedule K-1s, 1095-A, etc. Create a spreadsheet of your earnings and deductions (such as business expenses) to help you later on.
Make Sure You Have Everything
If you missed a receipt, charitable donation, or mileage costs, you won’t be able to claim them on your tax return. Make sure that you have everything in order before you begin to file. Do a quick google search for commonly overlooked tax deductions and make sure that you aren’t forgetting anything. Some commonly forgotten deductions are: moving expenses, job-hunting costs, child care, summer camp costs for your children, educational expenses, and energy-saving home improvements.