The tax deadline is fast approaching and many people who have never paid their taxes are nervous when they file their first return. According to the IRS, 25% of all taxpayers wait the last two weeks before the deadline to prepare their tax returns. If you fall into this category, check out these helpful tips to help you get the job done right.
-Use a checklist for preparing tax returns to make sure you have everything you need for filing.
– Have your forms, receipts and other documents nearby for easy access
-Be aware of your filing deadlines
-If you have already filed, prepare last year's statement for reference
Remember, knowledge is power
The tax process can be daunting for anyone, especially the first preparer. Did you know that the average American only gets about 50% on personal finance matters related to tax returns? It will be important for you to research your tax options, educate yourself and understand which items are deductible and could provide you with higher returns. Don't change yourself by rushing your due diligence. There are programs available that can help you. For example, The Volunteer Income Tax Assistance (VITA), offers free tax assistance to people who earn $ 54,000 or less and who need help preparing their own returns.
Choose the right IRS forms
The simplest form is 1040EZ. People with incomes below $ 100,000 use this form.
Choose your software or tax preparer
Tax preparation software is popular with DIY enthusiasts. You can find a multitude of preparation options on the cloud or on the computer. If you need the help of a professional tax preparer, it is important to find a reliable choice. Talk to friends, colleagues or someone you know who has experience preparing tax returns. Make sure you find out about their fees and, most importantly, get their tax preparer identification number.
Decide how you will file
There are two options available for sending your completed tax returns. The first is to file electronically via an authorized IRS electronic file provider. The other is to download the required forms, fill them out, sign them and send them by mail. If you're expecting a refund, the electronic file will certainly ensure you get your money back faster.
Take security measures
Be careful when filing your taxes. Make sure you are working on a secure network. Make sure you don't use public Wi-Fi and don't forget to have a unique and strong password for all tax related accounts.
Make a plan for your tax refund before you receive it
If you are one of the lucky taxpayers who expect a refund, you should have a plan for your money. Before you go out and spend your refund, remember that the IRS does not send you a tip check. It was money that should have been yours from the start. So be sure to give your pending refund a special purpose.
An excess of 50% of Americans have no savings per se. So the best time to start saving is your tax refund. This could help you make a big financial step in the right direction. How about putting your repayment toward bill consolidation or other savings goals You may also want to consider investing your money in CDs, bonds or real estate. Whatever you decide, make the most of the money you will receive.
Ready, ready, file!
Now that you've gathered all of your documents and completed the IRS forms, it's time to take a deep breath and file your taxes.