Tips on Organizing and Filing April Taxes
Gather those receipts & tax forms...
According to the IRS' there are 2 groups of filers -- those who get their returns in as soon as they have their W-2's & 1099's and those who file at the 'last minute'.
Interestingly many of the 'last minute' filers have money coming back but do not have their records organized and feel overwhelmed by the process.
According to the Consumer Reports National Research Center, only 40% of Americans think they can find a document at a moment's notice.
Do not carry the added stress until April 15, get started so you have time to gather all of the information that can actually help reduce your tax burden.
Tips to get & keep you organize: o Have one place to put all those tax related papers & receipts.
Envelope, accordion file, box etc.
o Using software to track your expenses & balances like MS Money, Quicken, Quick Books etc is great at helping you sort your tax related expenditures but you still need to keep track of your physical receipts.
o Can't remember all the things you did or might need this year? Pull out last year's income tax forms to review & refresh your memory.
o If you are going to work with a tax preparer, write a list of questions before your meeting so you don't waste time or forget anything.
o Depending on your particular situation don't forget the following documents: W-2's, Homeowner's Credit, Education Credit, Energy Credit, Mortgage Interest Paid, Property Tax Paid, License Plate Fees, Retirement Contributions, 1099 Interest & Dividends, Mileage ($.
50 per mile business, $.
14 for Medical & Volunteer Work), Non Cash & Cash Donations, HSA Contributions, Self Employment Expenses including home office deductions if applicable, Medical Expenses & Health Insurance (can be used if over 7.
5% of AGI).
o So how long do I need to keep all this stuff? Rule of thumb: Keep all tax related information 7 years -- check with your tax professional or legal council.
As a general rule, The IRS can go back 3 years and audit your taxes.
If they find you have under reported your income, they can go back 7 years.
If they suspect fraud, they can go back to birth! Caveat: I am told that there is NO statute of limitations if you have not submitted your tax return.
Also, if you have submitted your 2004 tax return in 2008 -- it's still considered part of the past 3 years returns.
When you start working on your taxes, it's also the perfect time to sort out the old information you no longer need.
To help avoid identity theft, shred information that contains your personal information.
o Something new this year: Financial donations for Haiti dated between January 11, 2010 and March 1, 2010 can be claimed on your 2009 taxes.
Also, if you make less than $57,000 AGI, you may qualify for free tax prep & filing help.
Learn more at irs.
gov
According to the IRS' there are 2 groups of filers -- those who get their returns in as soon as they have their W-2's & 1099's and those who file at the 'last minute'.
Interestingly many of the 'last minute' filers have money coming back but do not have their records organized and feel overwhelmed by the process.
According to the Consumer Reports National Research Center, only 40% of Americans think they can find a document at a moment's notice.
Do not carry the added stress until April 15, get started so you have time to gather all of the information that can actually help reduce your tax burden.
Tips to get & keep you organize: o Have one place to put all those tax related papers & receipts.
Envelope, accordion file, box etc.
o Using software to track your expenses & balances like MS Money, Quicken, Quick Books etc is great at helping you sort your tax related expenditures but you still need to keep track of your physical receipts.
o Can't remember all the things you did or might need this year? Pull out last year's income tax forms to review & refresh your memory.
o If you are going to work with a tax preparer, write a list of questions before your meeting so you don't waste time or forget anything.
o Depending on your particular situation don't forget the following documents: W-2's, Homeowner's Credit, Education Credit, Energy Credit, Mortgage Interest Paid, Property Tax Paid, License Plate Fees, Retirement Contributions, 1099 Interest & Dividends, Mileage ($.
50 per mile business, $.
14 for Medical & Volunteer Work), Non Cash & Cash Donations, HSA Contributions, Self Employment Expenses including home office deductions if applicable, Medical Expenses & Health Insurance (can be used if over 7.
5% of AGI).
o So how long do I need to keep all this stuff? Rule of thumb: Keep all tax related information 7 years -- check with your tax professional or legal council.
As a general rule, The IRS can go back 3 years and audit your taxes.
If they find you have under reported your income, they can go back 7 years.
If they suspect fraud, they can go back to birth! Caveat: I am told that there is NO statute of limitations if you have not submitted your tax return.
Also, if you have submitted your 2004 tax return in 2008 -- it's still considered part of the past 3 years returns.
When you start working on your taxes, it's also the perfect time to sort out the old information you no longer need.
To help avoid identity theft, shred information that contains your personal information.
o Something new this year: Financial donations for Haiti dated between January 11, 2010 and March 1, 2010 can be claimed on your 2009 taxes.
Also, if you make less than $57,000 AGI, you may qualify for free tax prep & filing help.
Learn more at irs.
gov
Source...