One of many people’s least favorite times of the year is tax season. It’s when you have to dig in the dark depths of your cabinets and drawers for all the paperwork you need to file an accurate tax return.
Many people get so stressed about filing a tax return that they request help from a tax agent. However, if you’re planning on trying to do it yourself, here are a few helpful tips to make the process go as smoothly as possible.
Have the Experts Double-Check Your Work
If you’re planning on filing your tax return online, it can be worth having the tax experts run their eyes over it. Not only can they pick up any glaring problems, but they can also do their best to maximize your return. Who doesn’t want to pay less tax or enjoy a larger refund?
What’s more, because the government doesn’t take kindly to incorrect tax returns, it can be in your best interest to have an expert take the reins before your return is submitted. You can then spend less time poring over boring documents and more time doing the things you love.
Make Sure You’ve Got the Right Filing Status
There are five different filing statuses to choose from, which means there are five chances that you could get your filing status wrong. It’s best to choose the one that is most correct on the last day of the tax year or most applicable throughout the tax year.
You may fall into the single, head of household, married filing separately, married filing jointly, or qualifying widow(er) with dependent child category. If you fall into more than one category, you can choose the one that requires you to pay the least amount of taxes.
Gather All the Right Documents
Filing your taxes can take a lot of time. However, you can carry out the process faster by making sure you have all the appropriate paperwork in front of you. Before you get started, make sure you have received all the necessary documentation from your employer and bank.
Some of these documents may include:
- Wages – W-2 form
- Interest – 1099-INT
- Investment sales – 1099-B
- Social security benefits SSA-1099
- Dividends – 1099-DIV
If you’re not sure what you need, contact a tax return expert for help.
Do Your Homework on Deductions
It can take some time to work out which deductions you are eligible for, but the research can be worth it. You may be able to reduce your tax bill or increase your tax return with a little bit of awareness.
You can deduct medical and dental expenses if they exceed 7.5% of your adjusted gross income, and even self-employed health insurance is deductible. There are savings to be made in local and state sales taxes, property taxes, local and foreign taxes, and volunteer work donations. The IRS website has a list of deductions that’s worth checking out.
Know the Filing Deadline
If you’re a procrastinator, knowing the filing deadline for your taxes is essential. If you miss it, you can be hit with late filing penalties at a rate of 5% for every month you’re late. If your return is more than 60 days late, there is a minimum penalty of $100 or 100% of the tax due with the return – whichever is less.
You might be more than capable of doing your own tax return, but that doesn’t mean you wouldn’t benefit from a helping hand. Don’t be afraid to call upon a tax agent for help or utilize any of the helpful tips above.