Getting Organized for Tax Season
Dec 31, 2015
It’s almost that time of year again! Filing your taxes doesn’t have to be an ordeal. Advanced planning and preparation can streamline the process and lessen the hassle. Being prepared means you can file your return at the earliest possible moment. Here are some tips to help you get organized and eliminate unwanted frustration:
Gather all your documents. Before its crunch time, go through all of your desk drawers and gather all of your tax documents. Create a folder titled 2015 Tax Information. You can even go as far as separate the folder into categories such as medical bills, charity donations, business expenses, etc. Staying organized will not only lessen the burden, but will help you avoid missing valuable deductions.
Think about the past…and present! Remembering what you did last year can be tough, but if you keep excellent documentation, it will be a breeze! Determine those documents you accumulated for your 2014 tax return and then gather the same for this year. Be aware of any new regulations or significant changes in your life which may impact your documentation process. For instance, if you moved in 2015 for a new job, collect your moving receipts. Or if you refinanced a loan, make sure to include such documentation. In addition, don’t forget about child care, unreimbursed employee expenses, and education expenses.
What type of job did you hold during 2015? If you were employed by a company, you should be receiving a W-2 by the end of January. If you worked independently for a company or an individual, you will be receiving a 1099-MISC at the end of January showing your earnings. Be sure to include these forms in your tax folder! If you are self-employed, you will need to accumulate all relevant information required such as mileage records, bills paid to the credit card company or utility company, supplies or equipment purchased, etc. It is much easier to arrange all this information if you maintained records throughout the year. If you did not do so for 2015, be sure to start at the beginning of 2016!
Don’t forget about your kids. If you had a new baby in 2015, congratulations! You can now receive additional tax deductions and credits. You can now claim the dependent exemption, child tax credit, and the Earned Income Tax Credit. Make sure to apply for a social security number at the Social Security Administration for your new addition. Take the necessary steps to ensure you maximize the tax benefits of a new child.
Collect Form 1098 from your lender. The interest your are currently paying on a loan is deductible. Your lender will send you Form 1098 with the interest amount. If you have a vacation home, the mortgage interest is also deductible. The form outlines your annual real estate taxes which you have paid. These are also deductible. If you don’t own a home, no worries. Depending on your residential state or county, you may be able to take a deduction due to personal property taxes. This tax is typically on automobiles. So if you’re paying taxes on your automobile or other personal property, be sure to get a statement from the agency.
By: Kelly Butler, Staff Accountant
Categories: Other Resources