Tax season is right around the corner, and as a valued member of our credit union, we want to help you get ready with confidence. We know that gathering documents, crunching numbers, and understanding tax rules can feel overwhelming, but starting early can make all the difference.
The key to making your filing process smoother, is preparing ahead of time and staying organized so you don't miss any deductible expenses.
Here are some tips to help you prepare for tax season.
The first step in preparing for tax season is to gather all the necessary documents. Depending on your personal circumstances, these can include:
After gathering your documents, organize your finances to make the tax preparation process more manageable. You can store all your documents and receipts in a folder, binder or digital file to make it easy to access them whenever necessary. This will save you time and help ensure you don’t miss any deductible expenses.
In addition to your income information, you’ll need the Social Security number and date of birth of each dependent you claim. It’s a good idea to have this information prepared before you start filing your return.
You can also prepare any other details your tax preparer will need, such as the addresses of any rental property you own, the dates of any property you sold last year and more. Be sure to keep this information in a secure location until you file!
The tax code changes each year, and some of this year’s modifications may impact your tax situation. Be sure to review the most recent updates so you can take advantage of any new deductions or credits.
This can be especially important if you’ve experienced significant life changes during the year, like marriage, birth of a child or a change in employment status.
You can find a list of this year’s changes here: Prepare to File. See also our blog about the new deduction: New Vehicle Loan Interest Tax Deduction.
Your filing status determines the tax rates and the standard deduction you’re eligible to receive. Choose the status that best fits your situation. The most common filing statuses are:
Selecting the right filing status is crucial for accurately calculating your tax liability.
It’s essential to be aware of the tax filing deadlines. For most individuals, the deadline to file federal income taxes is April 15th. If the 15th falls on a weekend or holiday, the deadline is typically extended to the next business day.
If you need more time to file, consider requesting an extension, but be aware that this extension only gives you more time to file, not more time to pay any taxes owed.
You’re ready to decide how you’d like to file your taxes. You can file a paper tax return and mail it to the IRS, use tax prep software like TurboTax or H&R Block, hire a professional tax preparer, or e-file your return on your own.
The IRS also offers the IRS Free File program that provides free tax software for eligible taxpayers depending on adjusted gross income. For more information visit IRS e-File Free.
Finally, use the tax season as an opportunity to plan for the future. Consider adjusting your tax withholding to avoid owing big sums at tax time or receiving large refunds. Also, maximize your retirement savings to take advantage of tax-advantaged accounts like 401(k)s and IRAs.
This information is provided for informational purposes only. Please consult your tax professional for advice specific to your situation.