Get organized
Organization in general may already be on many of our resolution lists for the New Year, but organization when it comes to taxes is essential. Being able to keep track of all the relevant forms and documents may not directly affect the amount of money in your bank account after the tax man is done with you, but there are plenty of benefits.
Image credit: Stuart Miles | FreeDigitalPhotos.net
The first and most obvious is the time it takes to get your taxes done. Aside from the pain of having to give your hard-earned green to Uncle Sam, the time it takes to gather the forms and receipts is the worst part of tax season. Organization can also allow you to catch any mistakes you might make and possibly even some savings.
To get organized, start with a checklist of forms you need and mistakes to avoid. Keep all the information that you receive like paychecks or paystubs, W-2 forms, 1099s, and everything else you might need. If you are missing something, request another copy or look up the information online if you can.
Next, collect receipts and credit card statements that have accumulated over the year. Then compile everything neatly with similar documents grouped together.
Get started early
If you started early, you are giving yourself an advantage in multiple ways. For one, giving yourself a head start allows you a time cushion if you make mistakes or misplace documents along the way. It also gives you time to review things like your filing status, fund retirement accounts and review your estimated tax payment.
Also, starting early means getting finished early, and nothing is better than getting your taxes over with when it comes to tax season.
Explore deductions
Getting an early start will also allow you to take some time to research and explore deductions that you could qualify for. There are plenty of tax deductions that people often miss like small, personal charitable donations, job hunting costs and travel expenses for military reservists and freelancers.
Take some time to see what you might qualify for that can make your tax refund bigger. On the other end of the spectrum, make sure you are aware of any deduction that may have expired for this year. Make sure you are not counting on money you will never see. You can also save even more if you take the time to itemize.
Contribute to retirement funds
Don’t forget that tax day is the last day you can add to retirement accounts like traditional and Roth IRAs. It’s a good idea to contribute to your retirement anyway, plus a deductible contribution will lessen your taxes.
File electronically
It’s time to embrace the electronic age. Electronic filing is easier and faster for you and for the IRS. That’s good for you because the process takes less time, and less time spent doing taxes is always good. Also, since the IRS is able to process electronic returns faster than physical paper ones, you get your refund quicker.
Try to accomplish some or all of these for this tax season. If you take a look at your taxes this year and determine that you could use some help, consulting with professional tax specialists can also keep you on track.
Levy & Associates has a variety of tax-related services that can benefit a troubled taxpayer. Whether or not you need tax help, using smart tax practices this year could help you save money.
About the Author:
Lawrence Levy is the President and CEO of Levy & Associates, a firm specializing in IRS and state tax resolution. Visit http://www.levytaxhelp.com for help with traditional tax preparations, as well as accounting and bookkeeping services.
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