By law, employers must issue all W-2 statements by the end of January. Many people are waiting for these documents so that they can file their taxes. Most will scramble looking for papers to help claim those coveted deductions. However, it’s best to prepare during the year to ensure that there is no mad rush to file. To get a jump start on the 2018 taxes, here are some things to help speed up the process:
The best place to start is by finding out what forms are necessary to file. Some users file a 1040 A while others with uncomplicated taxes can file a 1040 EZ. Find out what deductions can be claimed, and make sure to have the receipts to document these itemizations.
Keep all the tax documents in one location. It’s advisable to retain about seven years’ worth of tax returns. Having everything in one location makes things easy to locate.
Add Up the Deductions
Has anything changed in the past year? Buying a house, adopting a child, and putting in an energy efficient heating system can make a big difference to the bottom line. The government allows write-offs for things that help improve energy consumption and the economy. Missing just one important deduction can cost thousands in write-offs.
One of the most missed deduction is those made to a charity. Things like dropping off clothes to the local thrift shop, making cash donations to a church or other charitable organization, and other acts of kindness can add up quickly. Make sure to have receipts to back up these claims as the government likes to audit those who have higher charitable deductions than the average.
Tax Professional or On Your Own
With the computer programs and internet options that are available today, many people can file their taxes without the use of an accountant. Small businesses and other complicated taxes should consider using a professional. Depending on your personal preference, either option can work for you. If you’re confident in the online applications that are available to you, they can be a great, cost-effective, and convenient option. However, if you feel as if you trust a tax professional more, you can always find someone who you feel suits you and your needs best.
Choose Between EZ and Long Form
Some people spend a great deal of time and money doing the long form when they could easily do the 1040 EZ. Internet programs will give the rundown on the best way to file, and for most, they don’t have enough deductions to warrant filing the 1040 A. Considering the long version and all the extra documents required, it may be less hassle to file the easier forms.
File an Extension if Need Be
An extension doesn’t give anyone any extra time to pay, but it does give more time to get the official documents turned into the IRS. Anyone involved in the hurricanes of the past year can automatically get an extension.
Regardless of government status, tax time remains the same. Make sure to file by April 15th or fear the dreaded penalties and interest. Take a few moments and get organized as is the best way to tackle the 2018 tax season.