deadline is fast approaching.
Records – Half the battle with tax preparation is tracking down your receipts and records. Highly organized people keep records and are organized throughout the year. However, start getting organized now and you can cut down on the pain later. Consider setting up different folders for organizing your income, deductions and any receipts you have receive through out the year. Many records could be found on line, but I suggest that you print them and file in folders. Not being able to substantiate deductions taken on a tax return can lead to an audit where those deductions can be reversed and you end up owing IRS instead of them owing you….so keep records.
How will you file – There are a number of options to consider based on your personal situation, however, last year, 84% of tax returns filed, were filed electronically and of those, 75% chose to file using a either a tax professional, tax attorney or Certified Public Accountant (CPA). You may wish to seek this option if you have a business, or have other situations which may be more involved. But, over the last few years, more and more people are choosing to use popular self-prepared online tax programs, such as Turbo Tax and H & R Block, to file their own tax returns. All online filers must be IRS approved so if there isn’t anything unique about your tax return, you might want to choose this route. There are plenty of on-line filers out there, so do your homework if you choose to file on your own and on-line. Either way you choose, the key is to assess your situation and /or comfort zone and make the decision that best suits you. However, if you do decide to use a CPA or other tax professional for your personal return, you may want to have an initial meeting to get to know them and hopeful reduce some of that anxiety.
Tax Forms – You’ll need one variation of the 1040 pursuant to your tax situation. There are also various schedules and odd forms you might also need. If you choose to file on-line, the forms are already built into the tax filing software and hence no need for additional forms. For paper filers, while you can print most forms off the IRS site online, some can be picked up at local businesses, such as libraries, banks and post offices and of course your local IRS office. But start early…nothing is worse than driving around a day before taxes are due trying to find the right forms.
Balance due? – If you are going to owe the IRS, start figuring out how you are going to come up with the cash. Can’t pay cash…the IRS now takes credit cards and if you can’t pay that way, you can set up a payment plan to get them paid over time.
Well, the best way to get a handle on the tax season is to be organized and to file early. The IRS will began processing tax returns, paper and electronic, on January 30, so don’t wait to the last minute. If you’re filing it yourself or using the services of a tax professional, set an official date in which you will file and mark it on your calendar. You’ll be happy you did and even happier when you could put this process behind you.