Tax Season: 5 simple steps!
Everything has its season and it is time for taxes. You have until April 15 to declare. Already done? If the answer is yes, wonderful! If the answer is no, here are some practical tips to declare your taxes easily and problem free!
If you don’t know how to prepare a tax statement on your own, you need the help of a tax preparer as most people do. In this case, you need to apply the following points before choosing a tax service.
1. Choosing a tax preparer
If this is your first time and you don’t have a tax service, talk to your trusted friends and ask them to recommend someone. I suggest you locate the best tax advisers at YaSabe.com. You can find them by area or check their qualifications. You can even find those that speak Spanish!
If you use the same tax preparer as the year before, you probably still have their information on hand. If you decide to find someone new, the tax statement of the previous year can serve as a guide for the consultant.
Be sure the chosen consultant has a Preparer Tax Identification Number (PTIN), which certifies them legally to declare federal taxes. If you agree with the proposed fees (Don’t choose someone that keeps part of your refund!), make an appointment immediately and begin the process as soon as possible.
2. Gather your Statement
Between the end of January and the beginning of February, you will have different types of information prepared to use on your statement. Basically, this is what you have earned during the year, either from the company you work for, your bank account, etc. Make sure the information matches your records and receipts.
Some of the most common forms you can get are:
- Form W-2, if you have a job.
- Form SSA-1099, if you get social security benefits.
- Various 1099, to report income like the cancellation of a debt (1099-C), dividends (1099-D), interests (1099-INT) and non-dependent compensation paid to independent contractors (1099-MISC).
- New Form 1095, details on where you obtained health coverage.
- Various reports 1098S, mortgage interests (1098), student loan interests (1098-E) and tuition payments (1098-T)
- Form W-2Gs, for gambling winnings.
3. Collect your receipts and donations records
You can choose to make personal deductions in detail if this produces higher amortization, instead of a standard deduction.
For this step, you need to review all yearly receipts and different deductible expenses. Find your medical expenses receipts. The ones not covered by insurance or reimbursed by another health plan. Find property taxes, work related receipts and investment related expenses.
If you made donations, you will need specific records to reclaim any cancellation. For example, for donations of $ 250 or more, you will need a certificate from the organization to prove you have received nothing in return. You can request this certificate from the organization where you made the donation. This refers to any type of donation.
If you need more time to complete your statement, you can request an extension until October 15, 2015 to avoid penalties. There is no extension beyond April 15 to pay taxes due.
5. Decide what to do with your refund
I know what you will say…buy, stuff! Make a trip! Save! If you are waiting for a refund, you must let the government know what you will do with it. With your tax preparer, choose the best option for you:
- Apply some or all refund to your tax statement for the following year. The funds will be used for estimated taxes, reduction or elimination of the first estimated tax fees. (Expiration: April 15)
- Check or deposit refund directly to checking or saving accounts.
- Contribute part of, or the entire refund, to certain types of accounts to purchase treasury bonds through direct savings.
- You can divide your refund between the options of direct deposit by completing form 8888.
I hope these points have been helpful! Best of success!