Tax season is right around the corner and its time to start preparing! Here are some general rules to follow that will make the tax season easier on the nerves.
Keep your paperwork together
Even if you are preparing your own taxes, in most cases you will need to have some paperwork to accompany your filing. Some people keep paperwork in a shoe box and other have an organized file. No matter your method, keep your paperwork! Here is a list of just some of the important items you will need:
- Receipts
- W2’s
- Previous tax year paperwork
- Bank info
- Mortgage info
- Vehicle registration information
- Child care receipts
- Medical billing
- Phone bills
- Charitable donations
- Investments
Choose how to do your taxes
There are several ways to file your taxes. There are factors to consider when deciding what method would work best for you and you should research each method carefully. Many accountants and tax preparation professionals will not only help you file your taxes accurately, but they will also assist IRS audits. Accountants and tax preparation professionals should be contacted early to set-up an appointment. As April 18th approaches, their schedule fills up quickly!
Tax software that you can use on your home computer is also popular for filing. Tax software can be purchased pretty much everywhere and allows you to file at your convenience and around your schedule. There are a number of software programs to choose from depending upon your budget .
Audit protection is one of the benefits for using an accountant or tax software. Another important benefit is that tax laws change year to year. Accountants who specialize in tax preparation should have a good understanding on how the tax code has changed. Tax software also takes into account the updated tax code. Accountants, professional tax preparation, and tax software are not usually free and the cost can vary.
Of course the other method is using documents provided by the federal and state government. Tried and true and sometimes tedious, paper filing may be a good option.
Whichever your method of tax preparation, accuracy is key and a little research up front may save you from a huge headache later down the road.
It’s not too late to get organized for this tax year!
Being that it’s February, it is not too late to get organized. Whether you use the “shoe box” method of saving receipts or having a detailed system of tracking receipts, the most important thing is to save receipts. No matter what method you use to file just keeping the receipts is key. Another key is tracking your expenses as the year goes by. Many smartphones have the ability to track your expenses on the fly. Others use home computers or paper log books.
What not to do with taxes!
Be sure not to be trapped into the these tax traps:
- Trust hearsay or word on the street (the tax code changes!)
- Put it off until the last minute (make your appointment early)
- Assume you owe or have a refund coming
- Don’t ignore your state taxes
Good luck and go get your taxes done!