You can make filing your taxes a breeze with these simple tips. Tax season is only a few short months away. Fortunately, that is ample time to begin preparing everything you need to make filing easier. Here are some tips to get you started.
The timeline for receiving all applicable information returns came with the end of January. Now that the calendar has switched to February, plan a time to gather them all together and verify that all of the information on them is correct. This includes Form W-2 if you are an employee, Form SSA-1099 if you are collecting Social Security benefits and Form 1095-A if you purchased health care from the government Marketplace. There are several other types of information returns that you may need to gather, so be sure to check the full list at https://irs.gov/government-entities/indian-tribal-governments/information-returns-filing-chart.
Next, gather documentation and receipts for any expenses that you wish to deduct through itemizing. Now is also a good time to do a basic calculation to determine whether itemizing or claiming a standard deduction is in your best interest, which is a task that a professional tax preparer can make easier for you.
The types of documentation you should gather include those that substantiate medical costs not covered by insurance or reimbursed by a flexible spending account, health saving account or other health plan. You will also need to find receipts for job expenses and expenses related to investments. Documentation for property taxes is also necessary.
The IRS offers a business deduction for a variety of expenses, such as cost of goods sold, direct labor costs and factory overhead. You can learn more about business deductions on the IRS website at https://irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses.
While planning your deductions, be sure not to forget about any charitable contributions you made in the past year. If you made donations to charity and itemize your deductions, you need specific records to claim any write-off. For claiming contributions, you need a written acknowledgment from the charity stating the amount of your gift and that you did not receive anything in return.
Taking a look at your tax return from the previous year can serve as a guide to this years tax season, helping you spot any overlooked expenses or any information that you havent yet gathered, such as the Social Security numbers and other personal information for all of your dependents.
Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income [AGI] amount from a prior tax return to verify their identity, states the IRS, which is another reason to ensure that your previous return is handy throughout the process.
If you cant locate information about your AGI, you can follow the steps outlined at https://irs.gov/individuals/electronic-filing-pin-request, which also provides information to prepare you to electronically sign your return in the upcoming tax season.
Even with the best preparation, taxes can be a complicated topic, and nobody wants to miss out on potential deductions or find out that they underpaid and have to cough up some cash unexpectedly. If you have any questions, be sure to talk to your tax professional.
If you are comfortable with your tax preparation, First Central has teamed up with TurboTax to save you up to $15 on TurboTax Federal products.