Tax Saving Tips
Our tax refund experts give you last minute tax saving tips to help you get organized, get the most tax deductions and tips for getting your tax return back quickly.When the tax deadline looms, you might be feeling a little anxious about filing your tax return. With these tax-filing tips and reminders, you can get through the process without too much stress.
Get ready for tax season with these expert tax return tips.
- Take your time. More mistakes are made by people who file at the last minute.
- Remember that tax laws change frequently, on both the state and federal level. So don't wait until the last minute to learn the new rules and regulations that are relevant to your situation.
- Be sure you to gather all the documents you need -- all W2 forms from your employers, 1099s (interest or dividends) and Form 1098 for reporting mortgage interest and real estate taxes you paid.
- Double-check your math. The IRS says that basic addition and subtraction mistakes are some of the most common errors on tax returns. (If you need help, find a fifth grader in your neighborhood.)
- If you plan to itemize, you'll also need to locate -- and keep -- records of charitable contributions and receipts for unreimbursed business, medical and other deductible expenses. After making computations from your records, sort your receipts and put them into envelopes marked with the year and type of records inside. This will help in the event of an audit.
- Are you missing a form? Don't panic -- nearly every form, worksheet and instruction page is available online via www.IRS.gov.
- Be sure all social security numbers (like yours, your spouse's and those of any dependents) are listed correctly.
Hiring a tax professional
- If you use a CPA or other tax-preparation service, be sure to check out their track record and ensure they're up-to-date on all the current IRS and state tax laws. (The State of California estimates that about 10,000 people illegally prepare tax returns in that state alone.) Your tax professional should also clearly understand your circumstances in order to help you receive the widest range of tax benefits possible.
- Take a few minutes to do a side-by-side comparison of this year's return with last year's to be sure you're not missing any deductions of have forgotten any other sections.
- If you're married, remember that you and your spouse must both sign a joint return -- and that's true even if only one of you is reporting income.
- If someone else is preparing your tax return, ask for an explanation of any items on your return that you don't fully understand. Remember that when you sign the return, you are personally responsible for its accuracy.
Tax filing methods
- E-filing is the filing method of choice for convenience, speed and accuracy. When your return is filed electronically, the IRS automatically checks for missing information and errors, and then you an electronic confirmation. E-filers who also use the direct deposit option will shave weeks or even months off the turnaround time to receive any refund due.
- If filing your return by mail, use the mailing label that came with your tax forms to speed your refund. Correct any incorrect information on the label.
- If you don't have your label, make sure you're submitting your return to the correct IRS office. (The appropriate address depends on where you live and whether or not you are enclosing a check or money order.)
- Checks or money orders should be made payable to the "United States Treasury."
- Make sure to actually include all W-2s and necessary schedules with your return, and make certain you have copies for yourself.
- Keep a hard copy of your entire returns (both state and federal) as a backup.
Deadline extensions and tax payment options
- An extension only means you have more time to fill out the paperwork -- you still have to pay the estimated amount of taxes owed by the April deadline. (If you're too far off your estimate when you eventually do file, you will face financial penalties.) Look for Form 4868 to get your extension.
- If you owe and can't afford to pay the full amount right now, you may qualify for a low-interest payment plan. By requesting such a plan in advance, you can avoid steep penalties and garnished wages from the IRS. Get more details and sign up for the Web-based Online Payment Agreement application at IRS.gov.
- You can charge your taxes on your Visa, MasterCard, American Express or Discover card for the price of a "convenience fee" (and, of course, whatever your credit card company charges if you keep a balance). Service providers: Link2Gov Corporation: 888-PAY-1040 (888-729-1040) www.pay1040.com, and Official Payments Corporation: 800-2PAY-TAX (800-272-9829) officialpayments.com
It's not too early to start planning for next April! Once this filing season is over, start researching tax-saving strategies for next year.
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