The income tax filing season has begun, and important tax documents should be arriving in your mailbox. Although your return is not due until April 15, you can make tax time easier on yourself with an early start. Here are 10 tips to help ensure a smooth tax-filing process.
1. Create a system for organizing tax documents as they arrive.
There is nothing worse than sitting down to finally do your taxes and realizing that you can’t find an important document. A little organization from the get-go is all you need to avoid that situation. Your system can be as simple as a large envelope or an accordion file. Just designate a specific spot, and make sure that everyone in the house knows about it.
2. Review your tax documents early.
As tax documents show up, don’t just stuff them into your great new organization system. Take a moment to review each document as it arrives so you can correct any discrepancies well before you start preparing your return. If there is a mistake, getting a corrected form can take time, so don’t wait until you are down to the wire on your filing deadline.
3. Gather your tax information now.
There’s no reason to wait until the heat of the battle to start organizing the tax information you already have. Even before you receive a single tax document, here’s how you can get a head start:
• Make a list of all your 2013 tax payments and tax refunds
• Gather all your receipts that have piled up throughout the year
• Comb through your credit card bills and checkbook to look for possible deductions
• Tally up charitable donations
4. Remember the number 17.
Check out IRS Publication 17, “Your Federal Income Tax,” at www.irs.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.
5. Decide whether you are going to prepare your own taxes or hire a pro.
There are many different options for filing your tax return. Give yourself time to weigh all the options and find the one that best suits your needs. If you think your tax return will be too complicated to prepare yourself, and you hire a professional, make your appointment early. If you are going to do your taxes yourself, decide whether you are going to use tax software. If so, you can get ahead of the game by purchasing your tax software now. Tax software can help you find every deduction to which you are entitled and helps you avoid common mistakes, such as simple math errors.
6. Let Free File do the hard work for you.
Using IRS Free File, you can prepare and e-file your federal return for free. If you made $57,000 or less, you qualify to use free tax software offered through a private-public partnership with manufacturers. If you made more or are comfortable preparing your own tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms. Visit www.irs.gov/freefile to review your options.
7. Try IRS e-file.
IRS e-file is safe, easy and the most common way to file a tax return. Last year, almost 82 percent of taxpayers — 122 million people — used IRS e-file. Many tax preparers are now required to use e-file. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds (if applicable) by direct deposit within 14 days and some may be issued in as few as 10 days if there are no problems.
8. Consider direct deposit.
If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than a paper check in the mail.
9. Review, Review, Review.
Don’t rush. Mistakes will slow down the processing of your return. Be sure to double check all the Social Security numbers and math calculations on your return, as these are the most common errors made by taxpayers.
10. Don’t panic!
If you run into a problem, remember the IRS is available to help. Use the Interactive Tax Assistant available at www.irs.gov to find answers to your tax questions, or call toll-free (800) 829-1040.
These tips are provided by Iowa State Bank in partnership with the Iowa Bankers Association and the Internal Revenue Service. If you have specific questions, contact your local banker at Iowa State Bank. Iowa State Bank is an Equal Opportunity Lender. Member FDIC.