Taxes are a necessary evil.
You may not want to file taxes, but you’ve got to do it. And, if you don’t, this may come back to haunt you as evading your taxes can carry criminal charges and some hefty fines.
Nonetheless, filing taxes can be stressful, especially if this is your first time dealing with a tax return. Here are 7 tips to help you file your taxes.
Gather Your Forms
If you are an employee, you’ll need your W-2. If you’re an independent contractor, you’ll need your 1099 forms. Also, gather other pertinent information like your health insurance paperwork, tuition statements (if you’re in college), mortgage and bank statements, and any other tax-related documents.
Lastly, if you want to itemize business expenses, make sure you have this information on hand as well. This includes receipts and even statements that show you’ve collected payments for renting out part of your home. This way, you’ll be ready to file your taxes.
And, remember: while there are new tax laws for 2018, this year you’ll still be filing based on 2017 tax laws.
Know What You Qualify For
Did you pay interest on any student loans last year? Did you have a baby? Did you move out of state for a job?
Regardless of how your life changes, it’s important to know which tax breaks may be available to you. Now is the time to do your research and learn about the different tax credits and deductions that you may be eligible for when filing your taxes.
Don’t Wait Until the Last Minute
The official deadline for filing taxes is April 15th every year, unless the 15th falls on a weekend or holiday. This year, taxes are due on April 17, 2018 – that’s right, you’ve got an extra two days as April 15 falls on a Sunday and April 16 is Washington D.C. Emancipation Day.
Even if you have to mark this date on multiple calendars, don’t forget it! Why? If you file your taxes late, you may incur penalties for not filing on time.
To prepare, try to have all of your documents ready to go at least a month in advance.
You Can File An Extension
Need more time? If so, you may need to file an extension and the deadline to do this for 2017 is the same date taxes are due – April 17. The IRS allows you to file an extension – for free – using one of their endorsed websites. These websites walk you through the steps you need to follow when filing for an extension. If you still aren’t sure what to do, it’s important to seek help from a tax professional.
Use a Software Program
Online tax programs like these offer automatic importing of your W-2. They also offer self-employment filing options for business owners who need industry-specific deductions or need to track self-employment expenses.
If you’re using a software program and need a little extra hand-holding, you can try calling the online company to speak to a professional. Just make sure you are aware of any possible fees involved.
Hire a Professional
If using an online software program isn’t your cup of tea, it’s a good idea to work with a tax professional. When you hire a tax advisor or accountant, this person will prepare your taxes for you and even help you find deductions to help reduce your tax bill. Better yet, a tax professional may help you get a bigger refund. While you’ll have to pay your tax preparer, you’ll likely worry less.
Prepare For Next Year
Once you’re done filing your taxes for the first time, make sure you start preparing ahead for next year. For starters, keep your 2017 tax information on hand for future reference and make sure that you’re claiming the right deductions on your W-4 form. You can always change this by calling your employer human resources department.
If you’re self-employed, remember to keep records for all of your expenses. This way, filing your 2018 taxes will be much easier. Just think: you’ve made it through your first tax return! Now you know what to expect and you’ll be able to approach next year’s taxes with a bit more peace of mind.