It’s almost time to file your taxes! We still have plenty of time before April 15th, but even if you are known to procrastinate and wait till the last minute, it doesn’t hurt to start gathering your information now. The biggest battle with tax preparation is tracking down receipts and documents. Make this task easier by starting at the beginning. Organize all your papers throughout the year, whether it’s done electronically or the good old fashioned way with folders and binders.
Self- employment: If you are an independent contractor and you have been paid for services in excess of $600, a 1099 form is required. Being self-employed means paying self-employment tax as well as income tax. Self-employment tax is similar to the Social Security and Medicare taxes which people with wages pay.
Correct Forms: Filing taxes is all about using the right forms. A variation of the 1040 form is necessary for your tax preparation. In addition to this form, you will probably need various schedules and other forms. Most of these forms can be printed from the IRS website.
Get Help: Everyone is eligible to use Free File, but depending on your tax situation you might want to hire a professional. One of the benefits to using an online tax service is that you can save your records and come back at a later time. Keep in mind that you are responsible to backup your online tax return with the relevant records, which will also prepare you in case of a future audit.
Pay up: If you know you are going to owe the IRS, start figuring out how you are going to pay for it. The IRS also takes credit cards.
Here is a checklist to get you started. Be sure to check with your tax preparer or use your online tax preparation services as a guide to ensure you have all the details covered.
– Gather the necessary Social Security Numbers
– You will need your bank account and routing number to receive your refund direct deposit
– Get a list of the taxes you have already paid throughout the year
– Gather W-2 forms for wages, salaries, and tips, 1099’s, Schedules, etc.
– IRA Contribution Information
– Gather all education related information such as paid tuition, student loan payments, etc.
– If you own a home, know what you paid in home mortgage interest
– Medical expenses
– Home office expenses, job search or moving related expenses
– Charitable donations