Nobody wants to spend time out of their day figuring out taxes. It’s not that fun determining how much of your hard-earned money is going to the government, after all. However, there are ways to make tax season less of an emotional drain and hassle. Armed with the right information, you can face tax season with peace-of-mind and calm. We can’t guarantee you’ll ever be “happy” when you do your taxes, but you definitely won’t be pulling out your hair in frustration if you follow the tips outlined below.
Find last year’s tax information
Ideally, you’ll have all of your tax information tucked away in a file organizer so it’s easily accessible to you. This will allow you to easily access hard-to-remember banking information, especially if the information hasn’t changed year over year.
If you filed with an e-filing service, there’s likely a virtual copy stored in your online account. As a note, you should always print out a hard copy of your tax return just in case you can’t access previous returns for some reason – such as being locked out of your account or the company going out of business.
Gather your dependent’s paperwork
Here are some of the items you’ll need if you’re planning on including dependents on your tax return:
- Adoption papers – if applicable to your family
- Childcare payment records
- Dates of birth
- Social security and tax ID numbers
- Death certificates – if applicable to your family
Remember, you might need other paperwork as well, so double-check with a tax professional instead of going it alone. A tax professional can also help you by breaking down complex parts of the tax system, such as what an IRS Notice of Assessment means. And don’t forget, protect and organize your paperwork in a safe or other areas, so you have all your important papers in one convenient spot that isn’t vulnerable to theft.
Find all sources of your income and evidence of each.
Your forms may include:
- Form W-2 for wages, federal and state tax withholding, tips etc.
- 1099-G if you’re unemployed and receiving unemployment benefits
- Form 1099-Misc for compensation from freelance or independent contractor work
- Form 1099-R annuity income, IRA, and pension
- Form 1099-Div for earned dividends
- Form 1099-B, 1099-S for income from sales of property and stocks
- Form W-2G for any income from gambling
- Any other earnings from prizes and awards
List out any possible deductions
Your tax deduction reduces the amount of your income that can be taxed by the federal government and state. If you decide that you’re going to itemize your deductions, you will need to have proof in the form of financial records and receipts. Here are several deductions you might be able to write off:
- Retirement contributions
- Sales tax paid on a new vehicle
- State and local taxes paid on a vehicle
- Relocation costs (that were not covered by an employer)
- Classroom expenses for K-12 teachers
- Vehicle expenses related to job
- Student loan interest
- Qualifying education expenses
- Any scholarships or fellowships received
- Childcare costs
- Insurance premiums
- Medical costs
- Charitable donations (make sure to save your receipt for this)
- Property tax and real estate records
- Investment expenses
- Rental home expenses
- Records of self-employment costs
These are just a few of the deductions you may be eligible for – the IRS website has a full, comprehensive list that you can use to guide you. Many e-file programs also prompt you with questions that may lead to deductions as well.
Get your resources together
There are tons of places you can go to get help with your taxes. You just need to know where to look! The IRS even has an Interactive Tax Assistant that can help guide you through your taxes before you start filing.
There are also plenty of ways you can file your taxes for free. For example, Free File Alliance has teamed up with the IRS to offer taxpayers Free File for those that earn less than $66,000.
Another resource is the Volunteer Tax Assistance (VITA) program that offers free tax assistance to those who make less than $54,000 per year, has a disability, or knows only limited English. These volunteers are all certified by the IRS to assist with basic tax preparation and electronic filing for those that qualify.
Conclusion
We get it, taxes aren’t fun. But that doesn’t mean you should ignore them. Ignoring your taxes could lead to serious consequences such as wage garnishment and big tax fines. Instead, prepare yourself for tax season properly and you’ll have absolutely nothing to fear.
