So You Want to Do Your Taxes, Now What?
Taxes can be tough, especially when you are anxious about an audit. Everyone’s tax needs are different, but anyone can use these tips to get started and get on your way to a refund!
1. Gather all of your materials as you receive them
As soon as you see your first financial document of the year, make a file for it on your computer, your email or your file cabinet. This will make it simple to gather your materials when it’s time to file your taxes.
2. Start early
Though taxes are due on April 15, you should receive all of your financial documents and forms by early February. File as soon as you have all of the necessary documents since you can receive faster refunds, you’ll have more time to pay taxes you owe and it helps prevent identity theft on tax returns.
3. Decide whether you want to file on your own or at a tax professional’s office
Filing on your own is nice because you can begin at any time of the day (or night). Many tax filing websites including the Internal Revenue Service (IRS) offer free versions for simple returns and paid versions of their service. Free versions often require you to have an income below $66,000.
If you prefer not to file online, you can pick up tax forms at your local library. Filing this way is great if you don’t mind a little math, and have an envelope and stamp handy!
Filing in person at a tax professional’s office may cost more than filing on your own but it can be helpful to get personal tax advice. This is a great resource if you are overwhelmed by the do-it-yourself process or you have complicated tax returns (E.g. you run your own business, buy a home, inherit property, etc.).
4. Choose between mail or E-File
Tax professionals and tax software often give you the option to E-File. Choose this option if you want your refund filed faster and you want confirmation the IRS received your tax return.
Filing by mail can be tempting because it is often less expensive than E-Filing. Since the IRS has to transcribe your information when you paper file it may take a little longer for you to receive your returns and there is a slightly higher chance for error.
If you decide to mail your return, make sure your name and social security number are on every page in case they are somehow separated. Also, don’t forget to sign and date your paper return! This is a very common mistake and can lead to your return being rejected.
5. Save your tax materials and returns
Normally the IRS can audit you for up to three years after filing your tax return and but in special circumstances they can go up to seven years. To be safe, keep your materials and a copy of your tax returns for seven years. It’s unlikely that the IRS will ask for these documents, but it is possible!