How to prepare for tax day
April 15th is deemed “tax day,” but hopefully you’ll have your taxes done much sooner than that. Before sitting down to file, make sure you are fully prepared for the daunting task that lies ahead.
This year, we’re making it easy on you. Though doing your taxes may never be something you consider to be “fun,” it can be a lot less stressful and run significantly smoother if you’re prepared in advance. And no, being prepared doesn’t just mean planning your summer cruise to the Bahamas with your refund check, or dreading taking money out of your savings to pay what you owe. It’s about having all the necessary documents gathered and organized, and being in a calm, clear state of mind. Without farther ado, we bring you tax day preparation essentials.
Do not procrastinate
First and foremost, don’t wait until the weekend before April 15th to file. If you realize you’re missing a document or are confused on a step, you are more apt to make a mistake and miss out on a greater return. Allowing yourself plenty of time to get your taxes done minimizes the chances of any mistakes being made.
At the start of the year, you probably received numerous documents (W2s, 1099s, retirement account information, interest paid on student loans, medical expenses, etc.) that are necessary to filing your taxes. Keep these in a safe spot — such as a locked file cabinet or a folder in your office. For other necessary documents, H&R Block has a handy questionnaire you can answer and it will provide a personal checklist of documents you’ll need. We recommend printing this personal checklist off and gathering all paperwork.
For H&R Block’s questionnaire, click here >>
Decide if you’re going to hire a professional
Hiring a professional tax consultant is going to be more expensive than filing yourself, but it saves you the hassle and time. If you have little to no experience with taxes or have complicated returns, a professional could be in your best interest. Plus, there is much less of a chance of a tax professional making a mistake than if you file yourself.
When you finally decide to take the time to sit down and crank away at your taxes, be as thorough as possible. Typically, it takes professionals between 30 minutes to one hour to file a client’s taxes. If you’re doing your own, it could easily take three or more hours. Reasons for taxes taking longer than normal include:
- Purchasing a home
- Having a child
- Being self-employed
- Having multiple write-offs (vehicles, medical bills, mortgage interest, donations, etc.)
If you’re not experienced with taxes, be willing to ask questions (sites such as TurboTax offer help lines) and plan on spending a significant amount of time to ensure you’re filing correctly. Consider breaking the sections up over the course of a few days. Whether you decide to tackle the whole thing in one day or break it up, make sure you don't rush through it and miss something. Oh — and don’t forget your coffee!