It’s That Taxing Time of Year Again

No doubt, you have already started gathering documents and receipts you need for filing your income tax return, especially if a tax pro is standing by to help. Here are some helpful tips that should make the job a little less stressful.

Get organized. Tax preparation generally requires W2s, 1099s and other income-related documents; receipts for charitable donations and other deductions; and copies of IRA contributions and other expenses that allow you to adjust your income. If your bank or credit union makes e-statements available, it saves time to go to their site and download all of your e-statements for the year. It’s also helpful to use the previous year’s taxes as a guide.

Decide who will prepare your return.  If you use a CPA or tax preparer, hand off an orderly set of documents. You’re paying for their expertise and guidance, not to organize your files. You can find an authorized tax professional in your area by searching the IRS online directory. If you’d rather do your taxes yourself, you can file them electronically for free, or you can buy tax prep software that walks you through every step and highlights deductions you may be overlooking.

Details are essential. Mistakes can slow down your tax refund, so review what you are sending, reading each document carefully and double checking calculations to avoid errors. As you’re no doubt well aware, the IRS tracks every taxpayer through a Social Security number, so making sure both you and your spouse have these on your paperwork is critical.

Also, don't forget the ID numbers of your dependents. You'll need those numbers, too. This includes everyone you claim, from elderly parents to infants. If your kids don't have their numbers yet, contact the Social Security Administration immediately. And don't forget the tax identification number of the person or business that takes care of the children while you're at work. You'll need it if you file for the child care credit. A missing Social Security number for any person listed on your return could cost you

Of course, be sure to save a copy of the return for your records before sending it off. If you have a tax preparer or CPA do your tax return, they will usually provide a complete copy for you to keep.

Set up a file for next year. If you haven’t done so already, start collecting your tax documents for next year. This applies even if you manage your finances electronically; create a folder or try a handy smartphone app to keep things organized. You’ll be glad you did when tax season rolls around next year.