Obtaining and organizing all the necessary documents and receipts can be a tedious, and often stressful, chore.
It’s helpful for you to know exactly what you need to file and how to do it.
Organize Basic Information & Forms
The first thing you’ll need is personal information for yourself and anyone else you’re filing with or for, such as your spouse or children, Turbo Tax explained. This includes social security numbers and dates of birth.
After this, you’ll need income information. This comes in many forms, but most people should have a W-2.
Money magazine said this is the most important form because it shows the bulk of your income information, including how much you earned and how much went to a retirement plan, a child care reimbursement plan, taxes or medical accounts.
As you may know, your job isn’t necessarily the only place you receive income from.
Other sources, such as investments, pensions and unemployment payments, are documented in different forms, namely the suit of 1099s:
- 1099-MISC: You’ll get this if you did any freelance work for more than $600
- 1099-C: This will come your way if a creditor forgave an outstanding debt
- 1099-DIV: Investment companies will send this out highlighting capital gains and dividends paid out to you
- 1099-INT: This will explain the taxable interest paid out to you
- 1099-B: A broker will send this out to detail the stock transactions you made
- 1099-R: You’ll get this if you received any income from a retirement plan
- 1099-G: This will outline the unemployment payments you received this year
Other forms of income, like revenue from rental properties, will also need to be documented in order for you to do your taxes.
Hold On To Your Receipts
One of the upsides of filing your taxes is the potential to get a tax return. You can boost the amount you get back if you know what purchases you’ve made over the past year that will qualify you for a deduction or a credit.
A common deduction people qualify for has to do with payments on your mortgage. Every point and interest payment made is deductible and will be listed in a 1098 form. Interest payments on investments also qualify.
If you have children, they can also contribute to a tax break. Be sure to have information handy about your child care provider, including the name, address, tax ID and the amount you’ve paid over the past year.
If you adopted a child, you’ll need his or her social security number, medical information and documented transportation costs.
If you’ve made a charitable donation this year, be sure to bring in receipts that show how far you drove, how much money you donated or the value of the items you gave away.
Pick Your Tax Filing Software
There are several different ways to file your taxes.
Some choose to go to a tax professional for help to make sure everything is done correctly. But many decide to do it on their own using the help of software.
There are many options to choose from, but PC Magazine recommends a few of the top brands. TurboTax was the editor’s favorite, but Tax Act, H&R Block, Jackson Hewitt and TaxSlayer all offer software that received favorable reviews.
Be Mindful of Common Errors
Filing your taxes is not difficult, but people tend to get nervous about the process. In reality, it is pretty straightforward, and if you read through your form you will get it all correct the first time through. However, people make mistakes. It happens. The Internal Revenue Service actually put up a checklist of common errors on its website, which is worth checking.
Here are a few examples of common errors:
- Simply not printing information clearly enough, such as your name, social security number and current address
- Choosing only one filing status
- Calculating deductions incorrectly, such as charitable donations and business expenses
- Entering the wrong routing number when selecting direct deposit as a method of return
The IRS also noted it has an e-file system, which sends back your form instantly if it detects errors. Since there is only a week left, this option could save you some time and ensure you get your taxes filed properly.
Getting ready to do your taxes can be stressful, but knowing what you need and how to file them will help.
Be sure to properly read through the paperwork to make sure you have everything correct, and be 100% sure when you submit. This doesn’t have to be difficult or stressful as long as you are prepared. Chances are, you will probably be pleased with your return when you click ‘Submit’ and even more when it shows up.
Stop procrastinating and get your taxes filed.
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