Now that 2014 has finally made its exit and we are welcoming the new year of 2015, tax season is right around the corner. While April may seem far off, it doesn’t hurt to start preparing early. Here are some tips to help prep for this year’s tax season:
1. Organize your records
Good organization may not cut your taxes but there are other rewards for having all your ducks in a row. For many, the biggest hassle at tax time is getting all of the necessary documentation together. This includes last year’s tax return, this year’s W-2’s and 1099s, receipts, etc.
Be sure to securely save each and every tax form that arrives in your mailbox. Designate a safe place to put all of those W-2s, 1099s and other statements as they arrive and group similar documents together into separate file folders. Be careful not to throw away any tax-related documents, even if they don’t look very important.
If you really want to make tax season go smoothly, use a personal finance software program like Quicken throughout the year so you have easy access to all the information you need.
2. Find the right tax forms
You won’t find all of them at the post office or library. Instead, you can go right to the source online. For example, you are able to view and download a large catalog of forms and publications on the IRS website or have them sent to you by mail. The IRS will also refer you to a private website that lists state government sites where you can pick up state forms.
3. File and pay on time
Sometimes, taxes end up being more complex than you expect. If you can’t finish your return on time, make sure you file Form 4868 by April 15, 20105. This form gives you a six month extension of the filing deadline until October 15, 2015. On the form, you will need to make a reasonable estimate of your tax liability for 2014 and pay each balance due with your request.
4. File electronically
Electronic filing works best if you expect a tax refund because the IRS processes electronic returns faster than paper ones. With filing electronically, you can expect to get your refund three to six weeks earlier. If you have your documents in order, consider electronically filing in January using software like one of the TurboTax programs or going through an independent tax preparer.
There are other advantages to e-filing besides a fast return. The IRS checks your return to make sure that it is complete, which increases your chances of filing an accurate return.
5. Decide if you need help
Most tax preparer software can handle the most complex returns with ease and allow you to file your taxes electronically for a faster refund. Most of the questions they will ask are very simple, for example, whether you got married in the past year, had a baby, bought a homer, or had some other significant life-changing event in the past year. Then the tax software will fill out the right forms for you.
The deadline for filing your tax return or paying taxes is midnight on April 15, 2014. It’s best to not wait to file your taxes until the last minute. Start now to get a head start on filing your 2014 taxes. A New Year means a new organized, more financially prepared you!