By Marcia Richards Suelzer, Toolkit Staff Writer
The IRS has issued their top tips for getting your tax paperwork in order. Now is the time to make sure that you have documentation for all your expenses in order to claim the largest allowable deductions or credits.
- Get your records in order. Everyone wants a lower tax bill. The best way to accomplish that is to make sure you claim every deduction and credit to which you are entitled. However, you need to be able to support the numbers that you claim. Now is the time to locate all the documents you'll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you're claiming on your return.
- Watch your mailbox. Payors need to mail you a copy of your Forms W-2 and Forms 1099 by January 31st. You need these documents before you can file your return.
Think Ahead. While you can't file your return until you have all the necessary Forms W-2 and 1099, you should do a "back of the envelope" calculation of your tax return. Doing so will give you time to arrange to pay any liability you might have. It also will indicate how much you could benefit from making an IRA contribution before the filing deadline.
- Educate yourself. If you are not having your returns prepared by a professional, make sure that you have the latest information about the tax law. The time-honored source for this information is Publication 17, Your Federal Taxes. However, for basic questions about individual tax returns, you can use the Interactive Tax Assistant, which can be found on the IRS website, to find answers to your tax questions about credits, deductions, general filing questions and more. The Interactive Tax Assistant does not provide information for business-related questions.
- Consider your filing options. Paper returns are rapidly becoming the eight-track tapes of the tax compliance world. In 2011, approximately seventy-five percent of individual returns were filed electronically. In 2012, professional preparers must file returns electronically (or hand the prepared paper return to the client for the client to mail).
- Use "Free Basic" to prepare your return. Let CompleteTax do the hard work for you with brand-name tax software or online fillable forms. It's available exclusively at www.completetax.com. Use CompleteTax to review your options.
- E-file your return. IRS e-file is safe and easy. It is also the most common way to file a tax return. Last year, 79 percent of taxpayers - 106 million people - used IRS e-file. Many tax preparers are now required to use e-file. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.
- Consider direct deposit. If you elect to have your refund directly deposited into your bank account, you'll receive it faster than a paper check in the mail.