With the deadline for filing your taxes fast approaching, I know there are some folks out there feeling a bit stressed. As a tax accountant I can see some of the anxiety that clients get just by looking at their notes on the papers they provide. Many are looking for a little extra help since it can be overwhelming. Here are a number of tips to help you either get through your taxes or help prepare you for next year:
- Start with what you had last year
This seems to be a common mistake I see with most taxpayers. When gathering all their tax information, they tend to forget to incorporate all the pieces. List out all the items you have this year such as the number of W2’s, brokerage statements, and all rental income and costs, etc.. Afterwards, compare that to your tax return from last year. Basically, did everything you have last year apply for this year and is there anything on your return from last year that you don’t have records for this year? This is a good starting point. From there, adjust for any changes during the year. Did you change jobs, have a child, or purchase a house?
- Have a tax folder
Throughout the year, taxpayers do activities that will affect their taxes. My suggestion is this: as you go through the year collect all those records in one place so you can add them after you’ve completed point number one above. This would include donation receipts, medical receipts, rental home improvement receipts, etc.
- File early
There are a couple benefits to filing early. Number one is that with more fraudulent tax returns being filed, the earlier you file, the less likely a fraudster can file a return and get your refund. If a return is already filed in your name and accepted by the IRS, the second return will get rejected and will not be accepted by the IRS. Second, you’ll avoid the rush. Even with simple tax returns, it could take upwards of an hour to complete the filing process with an online tax software package such as Turbotax. You want to avoid making a mistake, so start early and save it for later if you need to walk away.
- The extension is an option
Sometimes things get a little messy. It’s ok to file an extension if you need more time to get your all your tax items in order; however, I highly recommend paying as much of what you think you’ll owe before April 15th. Although you can extend the filing of the return, the IRS does not postpone when the payment is due and as a result will start accruing interest. Reduce these extra fees by paying what you can before the deadline.
These are just a few tips to help you get through the process and make it a little less painful. If you know of someone stressing over getting their taxes done this year, please share this article with them.