5 Easy and Useful Tips to Prepare Yourself for the Tax Season
It's time to start preparing for the tax season so you can file your tax return successfully and get a heavy refund check. By being prepared now, you will be able to file your return efficiently without getting any complications from the IRS. Get your tax preparation started right away and have a sigh of relief once you file your return on time.
Here are 5 useful tips that will help you start preparing to make the filing process easier:
Gather all Your Documents Gather all the necessary tax and financial documents and put them together. You will receive various tax forms depending on what you need. Here are some common tax forms:
- W-2 form if you are employed and your employer withhold the taxes
- 1099 Form, if you are a freelancer or independent contractor and the employer has not withhold the taxes
- Form 1098 for homeowners, 1098-E for student loan interest, 1098-T for tuition payments
- Form 1095-A to report information of health coverage taken from Marketplace
Apart from these tax forms, gather all the receipts, medical bills, credit card and student loan statements, and other financial statements.
Don't Forget the Deductions You can claim either the standard deductions or can itemize the deductions to maximize your tax refund. The standard deductions include the following:
- $6300 for single person or married couples filing separately
- $12,600 for married couples filing jointly or widows/widowers
- $9,300 for a household head
You need to keep track of your expenses and receipts if you choose to itemize your deductions. Here's a list of some expenses that can be deducted from your taxes:
- Volunteer work to help a charity
- Pro Bono work if you donated your time and services for a public event
- Job-related expenses, business meetings, car mileage
- Higher education expenses
- Tax preparation fee
- Foreclosure tax relief
- Mortgage interest, mortgage refinance fee, real property taxes
Apart from these, there are other deductions you can claim which you would have never thought were eligible.
- Section 179 deduction for business owners to recover the cost of certain qualifying property
- Home office deduction for people working out of their homes
- Disaster, casualty, and theft losses of personal items-home, car and other household items
Related Article: 8 Easy Ways to Save on Taxes
Avoid the Filing Mistakes There are many filing mistakes you make if you are self-filing. It's important to double check and make sure you are not making the mistakes. Some common filing mistakes you should avoid are:
- Failure to attach W-2 forms and other appropriate schedules
- Waiting for the last minute to request an extension
- Not getting a receipt from charity organizations
- Not signing and completing the tax forms
- Not entering account number for direct deposit
- Entering wrong Social Security Number, calculations and filing status
- Not entering correct data and additional income
- Mailing your tax forms to a wrong address
Take Help If Needed Figure out how you are going to file the return. You can do it yourself or take help from a professional if you find it difficult to analyze your tax situation. A tax preparer will help you simplify your complicated tax situation.
Stay Up-to-date with the Tax News Keep yourself updated with the latest tax news, changes in the tax laws or tax codes that might affect your tax return. Be vigilant and don't get off guard by the frequent changes in tax regulations, contribution limits and eligibility.
Follow these tips and start preparing early to have a great tax return experience this season!
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