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Most people dread this time of year because of all the filing and paperwork involved with taxes. Thankfully, it doesn’t have to be that way! Preparing your taxes can actually be a simple, no-stress process if you do a little work on the front end. All it takes is some organization and time.
Step 1: Know the Tax Filing Deadline
Mark your calendars: Your 2018 tax return is due Monday, April 15, 2019.(1) Income and investment interest forms should be mailed to you by January 31. So keep an eye out for those documents. If you haven’t received your tax statements by the first or second week of February, call the necessary people to be sure you receive your paperwork in plenty of time to get your taxes done.
Step 2: Gather Your Tax Documents
In order to do your taxes, you need to collect all of your tax documents. This includes your:
- Mortgage interest statements
- Investment income statements
To help get organized, download our free tax preparation checklist.
Don’t let taxes stress you out. A tax pro is the way to go!
If you plan on itemizing deductions, you’ll need proof to back up your claims. So don’t forget any receipts for deductions like:
- Education costs
- Charitable giving
- Home improvements
If this is your first season filing taxes as a married couple, congrats! There are several tax tips newlyweds should know. To keep your tax prep running smoothly, here are a few more documents you may need to add to your list:
- Form 8822 (if you moved)
- SS-5 (if you changed your name)
- W-4 (to adjust tax withholdings based on your new household income)
When in doubt, keep documents and receipts on file until it’s tax time. If you can’t find what you need, you can almost always request replacement copies. You’ll be glad to have these documents on hand in case you discover you can use them when filing your taxes.
Step 3: Organize Paperwork
Purchase a few manila folders, an accordion file or a filing system that will hold your tax documents. In one folder, put all paperwork dealing with income: W-2s, 1099s and investment interest statements.
In another folder, file paperwork for your deductions such as mortgage interest, property taxes, charitable giving and student loan interest.
Create a third folder to file receipts for deductions that aren’t in the form of statements, such as medical and home improvement expenses.
Step 4: File Your Taxes
Once you have all your documents organized, you’re ready to file your taxes! But which filing option should you choose?
According to a 2017 survey, most Americans chose to either hire a professional (32%) or use commercial tax software (35%) when they filed the previous year.(2)
Let’s take a closer look at online versus tax pro filing options to help you determine which is best for you.
Online programs like TurboTax can be straightforward if your situation is pretty simple and you’re planning to take the standard deduction.
However, if your tax return is more complicated—like if you own a business or know you need to itemize your deductions—it’s worth it to hire a tax professional.
You should be confident about filing your taxes this year, whether you choose to file on your own or use a tax pro.
Still not sure which option is best for your situation? Take our simple quiz!
Step 5: Relax!
Your taxes have been filed and you no longer have to worry about missing that April deadline. Thanks to your new organizational system, next year’s taxes will be a breeze.
Remember to promptly file any tax documents when you receive them so you don’t have to search the house for them next year. And once you’ve filed your taxes, save the documents for at least three years.
See? That wasn’t so bad. Was it? If you just take a little time and energy to implement these five steps throughout tax season, you’ll be set. Plus, you’ll eliminate the stress and worry if you’re organized on the front end.
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