Filing taxes can be complicated, boring, and downright dreadful (unless, of course, you love taxes like us!). Millions of Americans are finding themselves down to the wire as April 15th draws near. We understand the desire to push tax filing off to the very last minute, so here are some quick tax filing tips for those getting ready to crunch the numbers.
Tax Laws
Tax laws are like moving targets. They’re hard to keep track of, and they change from year to year. If you have children or follow finance, you might know this year’s big changes impacted the Child Tax Credit. The best place to find out about tax changes is the IRS website or your local tax professional.
Necessary Documents
Before you start the process of filing your taxes, it's easier to begin by gathering all the documents you might need. For most filers, this includes W-2s, 1099s, and deduction receipts. Having things on hand can ease some of the stress and confusion while you’re calculating. You should also consider if you plan to utilize Standard Deduction or Itemizing. You’ll want to be prepared to choose the option that minimizes your taxable income. For more information about Standard Deductions and Itemized Deductions, see our other blog post!
Tax Credits
Tax credits are always the talk of the town, especially in high-tax states such as New York or California. It’s helpful to know background information on which credits apply to the tax year, and which ones you qualify for. Common credits include the Child Tax Credit, Earned Income Tax Credit, Education Credits, and more.
Retirement Contributions
Many tax filers don’t understand the benefits and importance of Retirement Contributions during tax filing. Contributing to retirement accounts not only helps keep your financial future secure but lowers your taxable income. Evaluate your eligibility for contributions to IRAs, 401(k)s, and other available retirement plan options to make the most of them.
The best tip for ensuring smooth sailing during tax season is hiring a CPA. While you may have missed the deadlines this year, getting in touch with a professional to prepare for the next tax season is never a bad idea.
Filing taxes might not be the highlight of your year, but keeping informed makes the process less daunting. This year, use these quick tips to help you navigate the filing process, and remember to stay organized for the next tax year! Remember, you can always file for an extension, but must do so before April 15th! Happy filing!