There's a reason that death and taxes are lumped together: both are equally unpleasant, and both equally inevitable. But something that people don't realize is that taxes can be made significantly less painful if you prepare for them ahead of time.
Preparing to file your taxes well in advance of the deadline has a few distinct advantages: you won't be scrabbling around at the last minute looking for a stray receipt, or realize you need to contact your employer to get a form they've forgotten to send you. Planning ahead gives you the time to get things in order and squared away so there won't be any unpleasant surprises.
But how exactly do you get prepared and ready for tax day? What are the specific steps you should take? We're here to answer these questions today.
The most important step to preparing your taxes is getting all of documents and miscellaneous pieces of paperwork together and in one place. The kind of documents you'll be looking for fall into two basic types: expenses and income. Essentially, any movement of money into or out of your bank accounts should be accounted for and have a paper trail. This can include alimony payments, social security income, interest from car title pawns, investments, child care expense, etc.
Continuing from the point above, once you've gotten your paperwork and receipts together, you may notice that you're missing something. If this is the case, then it's important that you get it sorted out as quickly as possible. The reason is that if you need to ask your employer or another party for copies, it will inevitably take them longer to get them to you during the busy tax season.
For example, any employer you worked for in the preceding year should send you a W-2 at the beginning of tax season, but if you still haven't received them as the end of January approaches, there's no harm in calling or emailing the HR department to make sure the forms are on their way.
In today's modern information age, there's no reason to fill out your taxes on paper forms and mail them in the old-fashioned way. A more secure and convenient way to file your taxes is electronically. There are several programs and services to help you file online, and all of them will automatically check for all deductions you qualify for, which is one of the most easy and convenient ways to maximize your return. TurboTax is the most commonly used online tax program, but there are several others to choose from. Do a little research to find which one best meets your specific needs.
If you find that you're not comfortable or are having trouble e-filing, then you may have to seek the help of a tax professional or accountant. This probably won't be the case for most of us, but if you own a small business or have an exceptionally complicated tax filing, seeing an accountant can save you a huge amount of time, worry and money. Accountants are, after all, professionals, and filing taxes is one of their specialties.