Tax season tends to make many people cringe in fear, but there’s no reason to be terrified this time of year. The best way to face tax season is to be prepared and know what to expect. If you hire a company to prepare your taxes for you, all you need to do is ensure that you have all the proper information for said tax preparer, and then just trust that they’re doing their job.
If you have a relatively straightforward and simple return, you may consider doing your taxes yourself. Should you choose to do this, utilizing a tax software program like those offered by HR Block or TurboTax is absolutely in your best interest, and you might even choose to hire someone to review your return before you file it.
No matter which route you go, preparation truly is key. You need a number of completed forms that will be necessary to thoroughly and completely file your taxes.
· You absolutely need your current W-2s.
· Your previous year’s return is also a must.
· You may need various 1099s if you’ve worked as an independent contractor in the past year, if you have a dividend income, if you have a pension income, or if you had income from stock sales.
· Additional forms may be needed for a partnership or S-Corp incomes or various other types of businesses or income.
In addition to those forms, you need basic information for everyone who will be included or claimed on your tax refund: social security numbers, birthdates, and more. Also be sure you have thorough records of potential deductions. Here are some of the main deductions that people often overlook:
· Charitable donations and expenses associated with charitable work
· Moving expenses if moving for a job (even your first job!)
· Job hunting costs (if you’re already employed and searching for another job in your field)
· Child or adult dependent daily care costs
· Mortgage refinance points
· Medical costs (you have to reach a certain percentage of your income with these costs to claim them, but all expenses associated with medical care can be deducted)
· Tuition costs
· Home improvements that are considered energy efficient improvements
Additionally, be sure to include any expenses that may result in an income adjustment), as these will both help you to save money and possibly get more back after you file.
· Self-employment tax
· Student loan payments
· Tuition expenses
· IRA contributions
Regardless of if you’re filing your taxes yourself or hiring a tax prep company like BOSS, preparation and thorough records are key to your filling success, and they are the heart of this ultimate life hack guide to doing your taxes.
· US Small Business Administration https://www.sba.gov/blogs/ultimate-guide-business-taxes
· Investopedia http://www.investopedia.com/articles/pf/07/tax_prep.asp