It happens every year, but many of us still feel unprepared or stressed when it pops up on our calendar – tax season. While it probably won’t ever be your favorite activity, there are steps you can take early in the year to make preparing and filing your taxes a little easier – and maximize what you get back.
1. Decide if you will E-file or have your taxes prepared for you.
First, a plan of action. For many, preparing and filing their taxes online with just their employer-provided W-2’s will suffice. But it can get more complicated if you own property, have investments, or other special circumstances. Look into the options for your specific situation and have a plan early in the year so you’re ready when your documents arrive. The IRS also has resources to help you locate free tax prep services as well.
2. Schedule an appointment
Most tax preparation services will operate on an appointment-based system. However, that doesn’t mean your schedule should be free and clear in the event you’re filing on your own. Give yourself an hour or so on a weekend or day off to focus on gathering your documents and doing your taxes. It’s a task that’s easy to put off, but if you carve out the time like you would for a doctor’s appointment or an exercise class (depending how much you like exercise) you’re more likely to check it off your to-do list.
3. Have important resources bookmarked
Don’t waste time Googling or tracking down your log-in to file your taxes. Have these sites and all pertinent information ready to go when it’s time for you to file. Important resources include the site you’re filing on, how to track your refund, and where to find your W-2s or 1099s if you don’t have paper copies. It’s also smart to have your last year’s return in case any information needs updating. If you have a tax preparation professional filing for you, be sure to have all your documentation and financial information ready to take to the appointment with you.
4. Figure out if you need an extension
If you’re missing key documents, have complications filing, or another reason why you won’t make the April 15th tax deadline, you can look into filing for an extension with the IRS and your state.
5. Make plans for your refund, if applicable.
If there is any silver lining to the journey of filing your taxes, the pot of gold at the end of the tax rainbow would be it – your tax refund. Issued when it’s determined you’ve overpaid your taxes for the year, a tax refund is usually direct deposited into your account. Decide how you’d like to receive your refund (direct deposit or a mailed check) and then confirm your choice when you file. Next, you can decide whether you’d like to apply your refund to next year’s taxes, put it in a savings account, apply toward debt, or put it toward another purchase. Many people use their tax refund for paying down debt or for a large purchase they’d otherwise have to save for.
Preparing early for tax season saves you from being overwhelmed by all the steps involved – and in the case of using a tax professional, can save you money if you book early. With simple organization and planning, you’ll hit the ground running in tax season and will be well on your way to enjoying your refund!
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