My Personal Finance Blog

Make sure it is all there

Be sure you have attached all W-2’s and all necessary documents to your return, and have completed them correctly. Your social security is the most important identifying number, so check and double check that it is correct on all documents. It is also a good idea to put your social security number on the top of every form.

Check the IRS’ website

New deductions and credits are created every year, for your benefit. While we all like to think our tax preparers know everything, it never hurts to double check their work. The IRS updates their website frequently with all new tax laws, credits, and deductions.

E-File

If you are running short on time and cash, you can e-file (electronically file) your taxes on your own online. All the information you need is on the IRS website, and there are multiple help lines you can call for assistance. However, the sooner the better, as the IRS gets very busy this close to the tax deadline.

Be honest

The most important rule of filing your taxes is to always be honest. The repercussions you may receive for lying to get a deduction you do not qualify for could be a lot more than you would have saved. Check over your return one last time before sending it off to make sure you only claimed deductions and credits you qualify for.

Joint or separate

If you are married, take the time to see if filing joint will benefit you or not. Changing tax laws and situations may change which works best for you, so do not just assume you should choose the same thing you did last year. Also be sure to keep your spouse informed about potential changes. If you choose joint and they choose separate, or your info does not match, you may have an audit coming your way.

Make copies of everything

Before you mail in that return, be sure you have a copy of every single document and page you are sending. If you want to be extra safe then you might even ask the post office to give or send you a receipt so you have proof of post-mark. This will be your proof of filing if the IRS sends you an audit, or missing document letter, in the mail.

Use IRS mailing materials

The IRS sends you your own mailing materials for a reason – it makes the process easier for them. If you fail to use their documents to mail your return, you could be running the risk of receiving a later return. If details on the mailing materials are inaccurate, the IRS prefers you make changes right on the labels, in pen.

Not ready? File an extension.

If you are not quite ready to file, for any reason, definitely file for an automatic extension. There are numerous reasons you may feel the need to file an extension, but any reason is better than not filing your return at all. However, if you are going to owe the IRS money then you still need to have your payment to them by the 15th.

Seek professional help

If you are new to filing your own taxes, or have recently changed filing status (i.e. newlywed, new business owner, new parent, etc.), then you may want to enlist some professional help. However, if you are going to get help from a tax preparer then you will want to make an appointment as soon as possible. The closer to tax day it gets, the busier the tax preparer’s office is going to be.

The Tax Lady Roni Deutch and her law firm Roni Lynn Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced IRS tax attorney who will fight the IRS on your behalf.

It is hard to believe that another tax season is rapidly approaching. With the holidays around the corner, no sooner will you be finishing your Thanksgiving turkey than you will be sitting in your accountant’s office or loading tax software onto your PC to assist with filing your return. The following are several ideas to help simplify the tax preparation process.

Get Organized

The first step in preparing your taxes is gathering the data and forms you’ll need to complete the return. A good place to start is to look at your tax returns for the last three years and make a list of items that were reported. For example you should expect to receive a W2 form from each of the employer(s) you worked for in 2008. Create a folder marked Taxes 2008 and place the forms in it as you receive them. Use this folder to collect any other information or data that you’ll need for filing. Examples include information about mortgage interest, real estate taxes, interest earned and dividends, stock information, IRA contributions, charitable donations, k1 schedules, college tuition, alimony, unemployment, 1099s, social security received, medical expenses paid, etc. The point is to start getting organized early so that when the time comes to file your taxes, you have all the information you’ll need in one place.

Related, is the need for appropriate documentation. Proper documentation is needed for anything that is placed on your tax return, and you should be aware of documentation requirements. For example, charitable donations over $250 you must have a receipt in order to report the deduction. Another example is in reporting any investment activity. Any sale through the stock exchange needs to be reported on your tax return. If you lost money in the sale you can deduct up to $3,000 per year with additional losses carried forward to the following years. When reporting any stock activity, make sure you have a break down of what was paid for the stock originally and what the stock was sold for.        For example if you purchased xyz stock on May 1st of 2008 for $100 and sold the stock on June 1st of 2008 for $50, you have a loss of $50 which is deductable.

For taxpayers who are self-employed, start preparing your profit and loss statements now. The sooner the profit and loss statements are done, the sooner your tax preparer can begin working on the return, which could enable you to file an earlier tax return. In the event that money is owed, this gives you more time to make arrangements for generating the funds needed to pay the debt.

Get Knowledgeable

For taxpayers who have an accountant prepare your return, be sure to create a list of any questions you have for your accountant. If you do not consult an accountant, you can still get your questions answered. Some accounting firms will answer questions over the phone, and there is always the possibility of emailing your questions to a general mailbox. A good example of this would be to inquire about the first time homebuyer credit and what qualifications are needed to receive this benefit.

Be careful of firms that charge excessive fees for certain tax preparation services rendered. Do not be fooled by refund incentives in which the taxpayer walks away with a check in hand at the time of filing. This is called a rapid refund. A fee for the rapid refund service, which can be quite high, can be deducted from your tax return. However, if you choose to file electronically and wait 7-14 days for the refund, you will receive your entire refund. All that is needed to file electronically is the routing number of your bank and your account number for direct deposit. Another option is to have a check mailed to your address which can take 4 to 6 weeks.    

Choosing a professional to prepare your taxes should not be taken lightly or done at the last minute. It’s important to feel comfortable with your tax professional and to trust them.  A trusted accountant should be one of the many reliable sources you have available at all times—especially during the current economic situation. Their advice and council can help you make decisions and unravel the complexity of many financial transactions. If you currently do not have an accountant I strongly encourage you to begin interviewing potential candidates. Even if you prepare and file your own taxes, it’s still a good idea to have a third-party you can consult, to ask questions and keep you up-to-date on the latest laws and requirements.

This article highlights a couple tips and ideas to help you through the upcoming tax filing. They are designed to put you on the right track to getting the most from your return. To get more detailed information about filing your tax return, go to www.irs.gov or to email the author with your questions or comments, contact Harry Flanagan at Harry@apatax.com.

The auther has been tax Preparer for 5 years and is working toward completion of another degree at West Chester University.