What to Gather Before Filing Your Taxes – The Checklist
Tax filing is a priority come tax season. When you don’t file your taxes on time, the IRS will impose penalties and heavy fines, making your tax burden heavier. In addition, you need to file your taxes in the right way and attach all the forms required to ensure you pay the right amount or even get the tax refund the IRS owes you. To make the process easier for you, here is a checklist and things you should do.
Personal information
When you file your tax returns, there are basic things your need to have. You need to have your security number. Additionally, you need to have the security numbers for your children, spouse and other dependents you want to claim. Other details and information you should have include the documents you used to file your returns previous tax year and other supporting documents that will support your tax returns.
Income details and forms
Another important thing you need to get right is your income. If you are employed, you will be required to have W2 form that shows you income and the amount of income tax withheld for tax payment. Your employer is supposed to send you the W2 form by 31st January, but you can get it online with the help of a h&r block find my w2 software. In just a few steps, you will get your W2 form and you don’t have to wait for days or weeks for the form to arrive via mail. There are other forms you will need to show payments you received. These forms are 1099 forms and show all the transactions for investment earnings, online payments, interests, and more. With all the forms that show your salary income and other earnings, you can proceed to consider deductions and credits you are eligible for.
Deductions and credits details
After getting your total income, it’s now time to calculate your deductions and credits. Deductions will reduce your taxable income. You need to gather all the paperwork that can support your deductions. Some of the deductions include retirement account contribution, tuition and fees (educational expenses), medical bills, charitable donations, mortgage interests among other deductions.
Credit is more important that deductions as it reduces your tax bill dollar for dollar. You need to gather the documentation to support all your credit claims. When you have all the documentation, you will increase your chances of reducing your tax bill and even get a tax refund. American Opportunity Credit, Lifetime Learning Credit, Child Tax Credit, Home improvement – Energy Efficient Tax Credit, among others are some of the credits you can qualify for. With proper documentation, there are high chances you will get a tax refund after all.
Essential Tip
If you want to have an easy time come tax period, you need to have all the documentation. If you are employed, it’s advisable to use h&r block find my w2 software to get your W2 form early and start to prepare your tax returns. Also, know important tax filing dates such the deadline to file taxes. This will help you prepare your taxes in advance and file them on time. What’s more, in regard to deductions, you can choose to take a standard deductions or itemize your deductions. Use the route that will help you save hundreds of dollars.
Final words
It’s always advisable to prepare your taxes early or as soon as the IRS opens the tax filing season. Just gather all the documentation and prepare your taxes so that when the tax season is opened, you just submit them. Remember to pay what you owe on time, to avoid penalties.
