The IRS officially began accepting returns for most taxpayers, and will allow all returns to be filed in just a few weeks. Although tax filing season has not officially began yet everyone, there are plenty of actions you can take now to help make preparing your return less stressful.
1. Breathe
So many taxpayers get stressed out just at the thought of preparing for tax season. Be sure to take a deep breath, and try not to get too worked up over your tax return. You have plenty of time before the April deadline, and this year you have until the 18th. By getting started now you are going to have a much less stressful tax season.
2. Gather Tax and Financial Documents
It is a good idea to put together a designated folder for your tax and financial documents. That way, when it comes time to prepare your actual return you will have all of your information already organized. Some items you will want to include in this folder ate W2 forms from employers, 1099 forms if you worked as an independent contractor or earned income from investments, receipts from charitable contributions, mortgage interest statements, vehicle registration bills, etc.
3. Get Copies of any Missing Materials
If you are missing any documents, then you will want to get copies as soon as possible. For example, you might need to print out copies of bank or credit card statements for deduction you intend to claim, but can't seem to find the receipt.
4. Toss (or Shred) Unnecessary Documents
You don't really need every single bank statement or pay stub in your tax folder. If you do want to keep all of these documents put them into a different file. That way you will not feel overloaded with paperwork when you sit down and attempt to prepare your return in a few weeks.
5. Be on the Lookout for your Income Statements
You should expect to receive W2 and 1099 forms some time this month. Be sure that you are on the lookout, so that you do not accidentally throw them into the trash with your junk mail. If you do not get your W2 by February then you will want to contact your employer to make sure it was sent to the correct address.
6. Find your Return from Last Year
Make sure that you include your most recent return at the front of your tax file. Unless you changed jobs, or made a major tax move like purchasing a home, then you should be able to use your old return as a guide for completing you new one.
7. Verify the Exact Amounts of Charitable Deductions
The IRS has been cracking down on charitable contributions over the past couple of years. Be sure to look over your receipts and make sure that you can substantiate the market value of your contributions. Additionally, if your contributions exceed $500 you will need to complete IRS Form 8283, and if any item is valued at over $5,000 then you must obtain a written appraisal. For more information on charitable contributions check out this article on RDTC.com.
8. Anticipate Errors
There are a few common errors that many taxpayers make on their returns. Before you even begin to think about preparing your return look over some of these common mistakes, so that you are mindful of them once tax season begins.
9. Think About Hiring a Pro
If you have a complicated tax account, or simply do not want to hassle with preparing your own return then you should think about hiring a tax professional. Check out a few local tax preparation offices in your neighbor hood and make an appointment before they start getting busy.
