8 Beneficial Steps to Filing Your Taxes

 

 

Every year Americans have to file their taxes unless they are unemployed or don’t earn enough income to qualify having taxes taken out of their income. There are heaps of free tools available to help you prepare your taxes and determine if you will get a refund or owe money.

Some of the most widely used tax preparation tools are Turbo Tax, Tax Cut and Tax Act and tax calculators available on top sites like Bankrate.com, MSN.com, or CNN.com/money.

One of the reasons many Americans miss claiming deductions or end up owing taxes or is because their financial documents are not in order. Many taxpayers throw away, misplace receipts, or falsify documents because the original documents cannot be located. Here are 8 beneficial steps to help file your taxes.

PICK THE RIGHT TOOL

Compare the self-help tax preparation tools and read customer reviews. Using tax preparation software has all the tax laws embedded in the tool, which makes it easier for you to see what deductions, and credit you are eligible to claim.

GATHER

Gather and categorize all receipts, gather monthly, quarterly and yearly statements, medical bills, student loans, credit card statements, prescriptions, financial statements, etc. and store in an easy to find location.

 

PLAN AHEAD

Avoid waiting until the last minute. Use an automated tool to track your spending and deductions or use a piece of paper, or Word or software such as Excel or Access to enter your data electronically.

 

AUTOMATE

Use a software package like Quicken or Quick Books to record all of your deductions. Use basic column headings: Item, Date Purchased or Sold, Cost, Quantity, Total Cost.

LOCATE DEDUCTIONS

Identify all items that can be used as itemized deductions and put them in one folder. Determine if the standard deduction for your tax bracket is greater than your itemized deductions. If not, calculate your itemized deductions.

GO GREEN

File your taxes electronically. You will receive your refund in approximately two weeks from the date of filing and you help save the environment.

BE PATIENT

Avoid getting a tax refund anticipation check or refund anticipation loan. You are charged a fee to get your refund faster than waiting the normal waiting period due to a high interest rate charged for the loan. Save yourself some money.

HIRE A PROFESSIONAL

If you own a business, have multiple W-2’s or itemize several deductions consider hiring a certified public accountant or licensed tax accountant that can provide information on deductions and tax credits you may not be aware of.



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