There's no question that preparing your tax return can be a daunting challenge. And the more complex your finances, the more complex your tax return. Whether you prepare your own return or work with a tax professional, there are ways to make the process less burdensome. By now, preparing for tax season may feel automatic but a bit of upfront organization will save time and potentially money.
Here are some key activities to consider as you prepare for tax day:
- Have identification numbers handy. Make sure you have Social Security numbers, tax ID numbers, and your dependents’ information like Social Security and birthday dates.
- Collect documents that show your earnings. This includes your W-2 form from your employer, 1099 form for income from interest, dividends, capital gains or freelance work, and be sure to include any other income that may not be reported on a W-2 or 1099 (self-employment income, alimony)
- Gather documents that reduce your taxable income. Contributions to a traditional IRA and/or health savings account, alimony or qualified student loan interest are all examples of “adjustments to income.”
- Have appropriate records and receipts for itemized deductions. Itemized deductions include things like mortgage interest, state and local taxes, property taxes, charitable contributions, and casualty and theft losses.
- Don’t forget about tax credits. There are a number of tax credits available such as child and dependent care, qualified adoption expenses or even owning an electric car!
- E-delivery. We’ve gotten so used to getting tax documents by mail and putting them in a pile. But if you’ve elected e-delivery for any of your tax forms, remember that they may not come by mail. Don’t forget to log into those accounts to make sure you don’t accidentally miss something.
Please feel free to contact me at (440) 349-5110 if you have any questions. As always, we’re happy to coordinate with your tax professional to keep life simple.
To a smooth tax season,