Tax Season Reminders | Important Information from Our Financial Advisors
Tax Season is upon us and if you haven’t already done so, now is the time to plan and prepare to ensure smooth filing. Whether you meet with a tax professional or prepare your taxes yourself, the proper planning helps reduce the risk of costly errors when you file. Check out the tips below and prepare to tackle this tax season with confidence.
Gather Your Important Forms
Starting in January, you can expect to start to receive the forms you need to properly complete your tax return. If you are expecting a large refund, you will want to make a list so you don’t forget anything that could affect it. Once you receive your documents, first give them a scan to make sure they are correct and contact the sender if there are any discrepancies. Remember, even a simple misspelling can cause a flag on your tax return. Inspect all your documents carefully.
The forms you may need to look out for include:
- W-2s from your job
- SSA-1099 for Social Security benefits
- 1099s for additional income, interest, gains and losses
- 1095-A for government marketplace health coverage
- 1098s for reporting interest and tuition payments
- W-2Gs for any gambling winnings
- Schedule K-1s for company ownership
Create a List of Personal Information
While you probably know your Social Security number by heart, it’s a good idea to write down the Social Security number of any dependents that you wish to claim. It’s also a good idea to make a list of addresses for any property you own, as well as the dates on which they were bought or sold. Having this information easily accessible can be helpful to ensure that it is all accurate when filing.
Collect Important Receipts
If you own a business or plan to itemize your deductions, it’s important to track your expenses to maximize any potential write-offs. Collect receipts for business costs, medical expenses, and any other expenses that can be claimed on your Schedule A or Schedule C. These receipts can be physical copies or bank/credit card statements showing payments for these items. After gathering them, organize the receipts by category to make it easier when you're ready to file.
Acquire Records of Charitable Donations
Throughout the year, you may have made donations to tax-exempt organizations. These donations can provide you with charitable contribution write-offs, which typically require itemized deductions and documentation. Most organizations, from churches to fundraisers, can provide a record of your tax-deductible contributions.
More information on Charitable donations
Obtain a Copy of the Previous Year's Return
If you are using the same preparer as you did last year, They should have a copy of your tax return. If not, make sure to find an old copy and have it ready along side your other tax documents. Cross referencing from your previous return can help you see what you filed last year, so you don't overlook something this year.
Determine How You Will Spend Your Return
If you expect to get a refund this year, you might want to take some time to consider what you plan to do with your return once you receive it. You have the option to apply your payment toward your tax bill next year if you believe you will owe. This can be a good idea for those who pay estimated taxes throughout the year, as it can often put a chunk toward your first installment.
Alternatively, you can choose to send the money directly to a checking or savings account or contribute it to an IRA, health savings account, or education account. If you plan to split the funds between accounts, you will need to complete Form 8888.
Don’t let tax preparation leave you feeling overwhelmed. Enjoy less stress and a smoother process by preparing everything you need for filing this tax season. If you are ever unsure what to do when filing or after you receive your refund, our advisors are always here to help. Schedule a meeting today!
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.