Last Updated on
Preparing for the tax season can be a little overwhelming. There’s a lot of paperwork to gather and organize before you’re ready to get down to business, after all. However, by taking the time to stay organized throughout the year and knowing what to expect, you can navigate the tax landscape like a true expert.
Here are our tips to make your next tax season a little easier:
Gather Proof Of Your Personal Identity
If you’re visiting a tax professional, you’ll want to make sure you have everything you need to prove that it’s indeed you that is filing a tax return. You’ll want to bring your social security card or tax ID card to your tax appointment plus a valid driver’s license or passport.
If you have a spouse or children, you’ll also need to bring their identifying paperwork and IDs as well. Keep all of those important documents and IDs in a safe or in an organizer somewhere safe. And don’t forget to make copies in the event of a natural disaster or other calamity.
Stay Organized Throughout The Year
One of the most important parts of doing your taxes is starting early. Of course, there’s nothing to fill out when it’s not tax season, but you can save all of your paystubs in a file organizer, any receipts needed for write-offs, and other important evidence of your income or expenses.
In addition, don’t forget to print out and file away your tax return from the year before if you need some guidance for doing your taxes the next year.
Here are a few things you might want to bring to your tax appointment, depending on your specific employment circumstances:
- Form W-2: Wages, salary, federal and state tax withholding, tips, etc.
- Form 1099-G: Unemployment benefits
- Form 1099-Misc: Freelance earnings
- Form 1099-R: Annuity, IRA, and pension income
- Form 1099-Div: Income from dividends
- Form 1099-B, 1099-S: Income sales from property and stock sales
- Form W-2G: Gambling income
Again, these aren’t all of the forms that may apply to you but something to keep in mind as you gather your paperwork.
Know Your Tax Terms
Do you know the difference between a tax credit vs tax deduction? If you don’t, you might want to take the time to learn about how different pieces of tax code affect you. With that said, it’s not important to be a complete tax expert – but the more knowledge you have, the more pertinent questions you can ask if you’re confused about the tax process. Notate these questions and come prepared for your tax appointment with your tax preparer.
Stay Current On Tax Changes
Many Americans may not realize the changes to the tax code that occurred with the Tax Cuts and Jobs Act that President Trump signed into law in 2017. Depending on your tax bracket and other variables, you may not see any changes to your taxes. But for some, you could end up owing more or even seeing a bigger tax refund. In order to best anticipate how much tax you’ll be responsible for paying, you should estimate your taxes using the IRS 2019 tax estimator to see if you’re withholding taxes correctly.
Keep Track Of Charitable Donations
If you regularly donate to charities, many donations are considered tax-deductible. You’ll want to get the appropriate tax forms from the charities in question including a receipt of your donation.
Get Your Deduction Paperwork Together
If you plan to itemize your deductions, you’ll need evidence of those expenses. Here are a few records you’ll need to track down and organize:
- Self-employed expenses
- Rental home expenses
- Investment records
- Property tax and real estate records
- Medical expenses
- Insurance premiums
- Childcare costs
- Scholarships or fellowships
- Education expenses
- Student loan interest
- Relocation expenses
- State and local taxes paid out minus withholding
- Retirement contributions
These are only a few of the deductions you might want to think about. With that said, there may be more a tax professional could help you find if you choose to hire one.
Sure, tax season isn’t necessarily fun but hopefully with this article, you’ll have the tax tips you’ll need to stay cool, calm, and collected.
Arrest Your Debt's Pro Tip:
Track your investments for free with Personal Capital. It's how I track my pension and retirement funds.