Preparing Your Taxes
Organizing your paperwork for filing your income tax return should be easy. It’s merely a matter of collecting the clearly marked envelopes (“W-2,” “Business Expenses,” “Retirement Contributions,” “Credit Card Statements,” etc) containing the documentation relevant to your return. Those envelopes that you had, with clear foresight, prepared back in December, 2008, for this very moment.
Right?
If you’re like most this is a dream scenario. The cold hard reality often finds you frantically turning the home office upside while chasing scraps of tax documentation that have accumulated in odd places over the past twelve months. The night before the tax return is due.
There’s little you can do to save a late start (April 14th), but there’s much you can do to get organized and make the process less painful even now (sometime significantly before April 14th). Here are some tips.
• Separate and organize your relevant paperwork. Sort your W-2s, 1099s, credit card statements that might contain deductible expenses, charitable contributions receipts, and other related paperwork into folders. Remember, you can also deduct tax preparer fees. If you own investment property, be sure to corral all bank statements and receipts relating to the property. You can write off expenses associated with the property.
• Go to the IRS website (irs.gov) and review the latest information on filing and tax deductions. This can help you to further organize your paperwork. IRS Publication 17: Your Federal Income Tax is the primary reference document.
• Contact a professional tax preparation service. Now that you’ve organized the paperwork you might want to consider turning over the actual filing to a trained professional. A tax preparer can save you money on your return by finding deductions, and at the very least, will ensure a correctly prepared filing. Tax preparation is relatively inexpensive—sometimes as little as $100 for a simple return—when you consider the time, work, and worry that goes into preparing a return yourself.
• Start earlier next year.
Good luck!
