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Tax time has a funny way of getting your heart rate up. If you’re a money Nerd, it’s the sheer excitement of crunching numbers. For Free Spirits . . . well, let’s just say bungee jumping off a 100-foot bridge calms your nerves more than filing taxes.
Whatever camp you fall in, one thing’s for sure: We could all use a little help keeping things simple during tax season.
No sweat! These five steps will have you ready to file your taxes in no time! And, as a bonus, we’ll help you set up a simple system that will make filing next year’s taxes a breeze.
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Are you ready? Let’s get started!
Step 1: Gather Documents
You don’t need every scrap of paper with a number on it to do your taxes. But the ones you will need are essential. These documents usually arrive by mail soon after January 31:
- Mortgage interest statements
- Investment income statements
If you plan on itemizing deductions, you’ll need proof to back up your claims. This may include receipts from your childcare provider and any charities you’ve contributed to. Some college expenses are also tax-deductible, so keep track of those documents as well. If you can’t find what you need, you can almost always request replacement copies.
Step 2: Sort the Stacks
Now that you’ve piled up your paperwork, let’s get organized! Separate your documents into two simple categories: income and deductions.
- W-2s, 1099s and investment statements fall under income.
- Mortgage interest forms, property tax statements, charitable giving receipts and student loan interest are all potential deductions.
Put your documents for each category into separate folders so nothing gets confused. If you really want to get crazy, create folders for this year's taxes so you’ll have a place to put receipts and statements as they trickle in.
Step 3: Track Down Stragglers
Tax day may still be a couple of months away, but April 15 has a way of sneaking up on you. That’s why it’s important to keep your eye on the calendar to be sure you have everything you need to file successfully.
As we mentioned, most of the tax documents you’ll need should be mailed by January 31. If you haven't received them yet, get in touch with the necessary people to make sure you have these forms in plenty of time to meet the filing deadline.
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Step 4: Choose Your Path
Now that all your ducks are in a row, you’re ready to file your taxes. But you’ve got a decision to make first: Will you go it alone or hire a pro to see you through?
If you only have your W-2s and no complicated deductions to claim, self-filing may be a good choice for you. But if you have multiple sources of income or don’t know whether to itemize deductions, a tax professional can help you make sense of your options.
Step 5: Say Buh-Bye to Another Tax Year
With your taxes filed, you can watch the April 15 deadline come and go with confidence. Just remember to hang on to this year’s documents for seven years.
And, with your new system in place, you’ll be all set to file early when tax season rolls around again next year!
Make This Your Best Tax Season Yet
If you’d like to simplify your life and maximize your money this tax season, Dave’s nationwide network of tax Endorsed Local Providers (ELPs) can help. Each of our ELPs has passed our extensive approval process so you know you’ll be working with the best in your area. Find a tax pro you can trust today!