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January 18th, 2013 |
It’s time to start thinking about preparing your taxes. Fortunately, tax filing time doesn’t have to be so taxing. By taking a couple of hours to organize your finances now, you can coast into the tax deadline with plenty of time to spare and, possibly, more money in your pocket. People who wait until the last minute to organize and file their taxes could miss out on hundreds of dollars in valuable deductions and perhaps increase their chance for error. Take these steps now through the time you file your taxes:
1. Check your tax withholding today. Don’t keep giving the IRS tax-free loans with big refunds.
2. Know your tax bracket. By staying on top of your income bracket, you can make necessary adjustments in cash flow and withholding now and reduce surprises later.
3. Know your credits. You may be eligible for any number of tax credits. Child care, education, energy and other credits abound. Look ahead so you can take advantage throughout the year.
4. Organize your tax documents. Best to devote at least one drawer of a file cabinet to nothing but taxes; prior year’s returns and all tax-related documents.
5. Set up an accordion file, by month, for all receipts and invoices. If you have never itemized your deductions, this may be the year. Don’t miss out.
6. Set up a separate accordion file if you operate a business. Do not comingle business and personal documents!
7. Computerize your finances. Software programs, such as Quicken, will enable you to keep a running account of your cash flow and help you stay on budget. It’s integrated with your bank accounts and can upload everything you need into a computerized tax filing program. Huge time savings!
8. Schedule it. Once you’re organized, it should only take a couple of hours to prepare your return. Schedule the date. You are now in control. No need to put it off anymore.
Please note that due to the Tax Relief Act that was passed in December, the IRS is creating new forms and making programming changes to its tax return system. As a result, the majority of taxpayers cannot file until January 30th, while other Americans will not be able to file their taxes until sometime in late February at the earliest.
Check with your accountant or tax preparer for more details, but generally speaking if you itemize your deductions using Schedule A, you will have to wait to file.
If you want to get your return as soon as possible, especially since there will be a delay, make sure you file electronically and have your return deposited directly to your bank account – that’s the fastest way to get your tax return in your hands.
Get started on your 2012 taxes for free using Turbo Tax today! http://turbotax.intuit.com/affiliate/sandys