** This article has been revised from its original version which was published on June…
April 15th is right around the corner, and we all know what that means – time to prepare your taxes. For many taxpayers there is still much to do before filing your federal and state income tax returns. All the paperwork and numbers can be overwhelming at times, but there are ways to reduce the stress and make the most out of your returns.
Here are a couple of tips to help you get organized and make the most out of your tax return.
- Organize your paperwork – This may be a challenge for some, but it is very important to keep the W-2 and 1099 forms in an accessible and safe place. You will not be able to prepare your taxes without these documents. Other important items are receipts, cancelled checks and other paperwork that support the income, deductions and credits you want to report or claim on your returns.
- Turn Off the Auto-Pilot – It is not a good idea flip on the auto-pilot when doing your taxes each year. You may not be able to claim the same amounts in exemptions and deductions that you did the prior year. New rules have been implemented which phase out exemptions at certain income levels and impose new limits on deductions. It is important to be mindful of the changes in tax law and IRS regulations, and ask your tax preparer what the new rules and regulations take effect this year.
- File On-Time – Although Federal tax returns must be filed before midnight on Tuesday, April 15, 2014 taxpayers can delay filing their federal return until October 15, 2014 if they file IRS Form 4868 by April 15, 2014. Despite the automatic extension, you are still required to pay your taxes by April 15, 2014. If you do not pay by April 15, 2014, then penalties could be imposed and interest charged on taxes not paid by that date.
- Don’t Rush – Sometimes taxpayers receive K-1 forms and corrected 1099 forms late in the tax filing season after they have already filed their tax returns. If you receive one or more of these forms after you have filed you will need to amend your return to include any income indicated on them. It makes sense to have the return already prepared and ready to go, but to wait until you are sure you will not receive any last minute tax forms.
- Check for Common Errors – Mistakes happen, even on income tax returns. Some of the more common mistakes made by taxpayers are as simple as incorrect Social Security numbers and math calculations. These common mistakes can cause a delay in getting your refund. They can oftentimes be avoided by simply taking the time to review your returns and then double check them again.
- Ask Questions – If you are paying a tax preparer to prepare your tax returns (which is recommended), then you should not feel uncomfortable asking questions. Your questions may lead to a deduction or tax credit that was not even on the tax preparer’s radar.