5 Tips to Help You This Tax Season
Getting ready to file your taxes? Here are 5 tips to help you this tax season.
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PrintAs we move into 2012, it's time to think about what's next -- and prepare to pay your taxes. Unfortunately, it's rather difficult to engage in future tax planning right now because it's an election year. For the past two years, politicians have been kicking the proverbial can down the road, trying to avoid actually dealing with taxes.
But that doesn't mean that you can't get a good start on your 2012 tax return. Here are 5 tips to help you stay better organized, and get ready to file your taxes:
1. Schedule Your Tax Preparer Meeting Now
As tax season progresses, appointment slots with tax preparers will fill up. If you have an accountant or some other tax professional help you file your taxes, now is the time to set the meeting. Call and arrange a time to come in. I like to schedule my meeting for sometime in late February. This provides the time for others to mail me their forms, which needs to be done by the end of January. However, it also gives me time to make adjustments if needed, hunt up missing information, and be ready to file my business tax return and my personal tax return in plenty of time.
2. Begin Organizing Your Documents
Whether you prepare your own taxes or have someone else do it for you, organized documents are key. Start organizing your documents right now. Set up a folder for tax documents, and as you receive mortgage interest statements, 1099-Misc, and W-2s, you can simply file them away. Look through the documents accumulated throughout the year and start pulling those you need for your taxes. You don't have to do this all at once. Start now, and work on it for half an hour a day for a couple weeks, and you should be ready for an appointment in February.
3. Consider Previous Year Deductions You Can Still Take
In most cases, you can only take a tax deduction in the year the expense occurred. So, in order to deduct something from your 2011 taxes, you actually have to have spent the money in 2011. However, there are some exceptions to this rule. Contributions to a traditional IRA, and contributions to a Health Savings Account, are still deductible until tax day. As long as you indicate that your contribution is for the previous year, you can count contributions made this year into certain tax advantaged accounts on the previous year's tax return. Remember, though, that you won't be able to count those deductions twice.
4. Look for Additional Tax Deductions
Even though it's too late to spend money for the previous year and receive a tax deduction (in most cases), you can still double check your expenses from last year to see if you are overlooking any deductions. If you looked for a job last year, related costs might be tax deductible. There might be other deductions for the business use of your home, or for unreimbursed expenses related to work. Double check the situation, and consider your expenses. If you can document them, you might have more deductions than you originally thought.
5. Get Your Tax Refund Faster
Make sure that you are ready to receive your tax refund faster. E-file your tax return, and sign up for direct deposit. Yes, the IRS will directly deposit funds into your bank account. If you file your tax return electronically, and if you are signed up for direct deposit, you can receive your tax refund in as little as seven business days. Not too shabby at all.
