Filing tax returns is a complex process that requires you to handle sensitive information accurately. One wrong detail and you’d end up paying more than what you should. Or, you’d miss getting refunds if you’re entitled to. That is why it is important to prepare for it accordingly.
But how should you prepare for the tax season? How can you avoid unnecessary hassles throughout the process?
Here are Helpful Tips for Conveniently Filing Tax Returns
1. Start Preparing far before Tax Season
This is certainly a reminder which many people forget. Remember to begin preparation far before tax season. For example, keep records of all taxable and non-taxable income, then start filling up your documents a few months prior to the deadline. This is to avoid missing the deadline, which means keeping yourself away from penalties.
2. Keep yourself Updated
Tax laws, rules, and regulations receive changes every now and then. And you don’t want to miss any of it. That is why, be sure to keep yourself updated of the latest info from the IRS, such as news, deadlines, and rules among other points. Visit the official IRS site and take time reading its updates.
3. Select how you want to Prepare Tax Returns
You can either prepare tax on your own or choose to hire a tax preparer or advisor. Preparing your own tax returns means you’d save expenses from service fees. However, hiring a tax preparer helps you sort out complicated details, especially when you’ve just gotten out of a major life change. Think of divorce, job loss and bankruptcy among other incidents.
4. Find a Reliable Tax Preparer
If you select the latter option in preparing your tax returns, be sure to find a reliable expert to help you. Check their background, credentials, and licenses among other essential details. Also, be sure to find one with the right fees and rates, then tell them to sign the dotted lines on the IRS filing forms.
5. Prepare your Documents
Be sure to prepare all the documents you need for filing tax returns. This includes records of tax returns, your social security number (SSN), SSN of your spouse, SSN of your dependents, you and your spouse’ W-2 form, as well as 1099 forms when needed. Also, prepare forms that indicate you deserve credits and deductions, such as 1098 for mortgage interest and 1098 T if you pay tuition fees. This can possibly pull down the tax you must pay.
As a valuable reminder, always check the complete lists of required documents and make a checklist out of it. That helps you make sure of not missing anything.
6. Get the Right Form
Be sure you get the right IRS forms. You can have them from IRS publications, or choose to file them electronically online. Avoid downloading or copying files then printing them for you to fill-up. That makes these documents invalid for filing.
7. File and Pay on Schedule
Late filing and tax payment mean penalties. The IRS imposes 0.5% for unpaid taxes each month, while late filing costs 5% monthly. Yes, you can file for an extension if necessary, but remember you can’t go beyond the deadline even with it.
These are important reminders you must remember in preparing for filing tax returns. You don’t want the IRS to come knocking at your door, so be sure to file accordingly and with accurate details.
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