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Does the thought of tax season make you break out in hives? Fear no more! Our easy, step-by-step guide will help you prepare for taxes without even breaking a sweat!
Most people dread this time of year because of all the filing and paperwork involved with taxes. Thankfully, it doesn’t have to be that way! Preparing for taxes can actually be a simple, no-stress process if you do a little work on the front end. All it takes is some organization and time.
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Step 1: Gather Documents
In order to do your taxes, you need to collect all of your tax documents. This includes your W-2s, 1099s, mortgage interest statements and charitable giving receipts. Don’t forget any receipts for other deductions like childcare, education costs and home improvements. If in doubt, keep the document or receipt on file until it’s tax time. You’ll be glad to have these documents on hand in case you discover that you can use them when filing your taxes.
Step 2: Know Dates
You must file your taxes by April 15. Income and investment interest forms are mailed to you by January 31. Keep an eye on the calendar. If you don’t receive your tax statements, call the necessary people to be sure you receive your paperwork in plenty of time to get your taxes done.
Step 3: Organize Papers
Purchase a few manila folders, an accordion file, or a filing system that will hold your tax documents. In one folder, put all paperwork dealing with income—W-2s, 1099s and investment interest statements. In another folder, file paperwork for your deductions such as mortgage interest, property taxes, charitable giving and student loan interest. Create a third folder to file receipts for deductions that aren’t in the form of statements, such as medical and home improvement expenses.
Step 4: File Taxes
Once you have all your tax documents organized, you’re ready to file your taxes! You can choose to file them yourself, or you can hire someone to do it for you. Programs like Turbo Tax are available for individuals who want to file their own taxes. If you’re a little uneasy about doing the paperwork yourself, Dave’s team can help you find a tax services professional to do it for you—all you have to do is organize your documents. Either way, make sure you feel comfortable with your decision, and then file away!
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Step 5: Relax!
Your taxes have been filed, and you no longer have to worry about hitting that April 15 deadline. Thanks to your new organizational system, next year’s taxes will be a breeze. Remember to promptly file any tax documents when you receive them so you don’t have to search the house for them next year. Once you’ve filed your taxes, save the documents for seven years.
See, that wasn’t so bad, was it? It just takes a little time and energy, and you’ll be set for life if you implement these five steps when you prepare for tax season. Plus, you’ll eliminate the stress and worry if you are organized on the front end.
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Dave's tax Endorsed Local Providers (ELP) are professionals who will take the time to explain your taxes and make sure you get every deduction you're eligible to receive. Don't wait until the tax crunch. Contact your tax ELP today!