Now that the holiday season is over, it’s time to start thinking about the dreaded tax season! Here are some ideas for preparing to file your 2013 taxes and to help you prepare for the 2014 tax year. Hold on tight because I’m going to fly through these quick tips about as fast as Christmas came and went!
Where to begin?
- How do you prepare? Your First step is to decide how you’ll have your taxes prepared. Do you use an online Company like Turbo Tax or H & R Block or do you have a CPA you use yearly? Some take the DIY approach and go through the whole process by hand!
- Get Organized! Yes, you have until April 15TH to file those returns but the sooner they have been filed, the sooner you can enjoy some peace of mind, and maybe some extra cash in your pocket! Even if you are not the most organized person, before the W-2’s and other forms start to arrive, begin by finding a specific location for all your important documents that will be arriving. Next start jotting down any major purchases made or new life events that have occurred like the purchase of a new house, car, or a boat. Maybe you had an addition of a new baby or a child starting college. When your list is complete you should do a little research on the deductions and the proper paperwork you’ll need to claim them or find a tax professional who can walk you through the steps to deduction success!
- Don’t Hesitate! Procrastination + IRS = Bad News! This goes back to my first point. Start early and try to stay organized. Once your list of life changing events is complete and you have all the proper paperwork in hand, begin the process. If you are using a CPA or tax professional get the documents dropped off ASAP. If you are the DIY type, get your forms ready or pull up the software of your choice and get the ball rolling. There is always a chance you will forget something important and have to go on a “turn-the-house-upside-down” hunt for one silly piece of paper standing between you and a significant return on your taxes!
- Get “Re-Organized”. Use this opportunity to clean out your filing cabinet (if you have one), and put everything in its place. This not only helps you make sure you are not forgetting any important deductions but helping you to get ready for next year’s tax season.
- Double check your returns! Even if you have the highest priced tax preparer available, you and only you will be dealing with the IRS if you are audited. According to Michael Raanan, MBA/EA, President of Landmark Tax Group and former IRS Revenue Officer, these are the 5 critical items you should check and RE-check before you file:
Be aware of your deductions;
Claim proper exemptions;
Ensure all your tax filings reconcile;
Document any questionable information;
File on time.
- Store your return in a safe place. Finally, you’re finished! Put your 2013 tax return and supporting documents somewhere safe. If you need to refer to your return in the future, you’ll know where to find it. For example, you may need a copy of your return when applying for a home loan or financial aid. You can also use it as a helpful guide for next year’s tax season which will sneak up on us at the same speed that this year’s tax season did.