Ditch the stress! Preparation is key this tax season.
Tax Season 2017 is around the corner. There are important things to know along with forms and information to have before you sit down to file your 2016 tax return.
The most important thing to remember before filing your 2016 taxes is to have all your ducks in a row. For example, if you’re itemizing your deductions, you don’t want to wait until the last minute to scramble together your receipts from the year.
How to prepare:
Know the start dates and deadlines:
- January 1st is the first day that RapidTax with begin preparing 2016 tax returns.
- January 23rd is the e-file start date.
- April 18th is tax day.
Get organized: Make a list of everything you believe is tax related in your life. Start out with big things like college loans, mortgages, etc. then move to the smaller details like organizing daycare receipts, health expenses.
Know changes in personal details: Did you retire this year? Did you change jobs this year? Purchased a house? Maybe you got married or divorced? These are all personal details you will need to include on your tax return.
Know updated tax laws: Updated tax laws will indicate if you fit in certain brackets for paying more (or less) in taxes. Feel free to always check back here for the up-to-date IRS news.
Know your state’s tax regulations: Many people forget to focus on the state return. Specific states have specific tax incentives.
For example, in Georgia, if your child goes to private school and you donate to a scholarship fund, you may receive a $2000 tax credit on state taxes.
Donate: Charitable donations will help you save on your taxes if you itemize your return. If you have donated thousands of dollars of clothing to Goodwill, this will definitely benefit you.
Exemptions: Before filing, know the social security numbers and birth dates of the dependents you are claiming. Each dependent you claim is an exemption subtracted from your AGI (adjusted gross income). A lower AGI means lower taxes.
What to have handy:
Depending on what type of income you earned during the year, you’ll receive certain forms at the start of the new year. Don’t throw these forms away. You’ll need them when filing your taxes.
Forms you may receive in the mail:
- W-2 (Wages and salaries)
- 1098 (interest on mortgage)
- 1098-E (interest on a student loan)
- 1098-T (tuition)
- 1099 (interest)
- 1099-MISC forms (self-employment or miscellaneous income)
- 1099-INT (interest)
- 1099-DIV (dividends)
- 1099-G (government payments)
- 1099-B forms (brokerage trades in stocks and bonds)
- 1099-R (retirement income)
- 1099-RB (railroad retirement)
- 1099-SSA (Social Security).
- 1099-SA (MSA or HAS distributions)
- K-1 forms (income from a partnership, small business, or trust)
- It’s a good idea to also have a copy of last year’s return on hand to refer back to.
If you moved during the year, make sure your employers have your new address!
Tax Related Expense Receipts:
You will need to save all receipts if you are using them on your tax return.
- Self-employed income and expenses (including home-office expenses, health-insurance premiums, transportation costs, advertising fees)
- Retirement contributions
- Moving expenses (if you have moved for new job)
- College expense
- Medical and dental expenses
- Real estate taxes
- Gifts to charities and churches
- Daycare and childcare costs
- Education related fees paid
- Non-reimbursed work or volunteer related mileage
Staying organized and planning ahead before tax season will make filing taxes on RapidTax simpler than it already is! After all, just like anything in life, failing to plan is planning to fail.
Monday, December 5th, 2016 at 1:44 pm and is filed under Late Taxes | Blog.