It’s almost time to start doing your taxes. To ensure things go smoothly, there are some important steps you need to take before you file.
Gather your receipts and tax documents
You can expect your W2s, most 1099s and 1098 forms to arrive by January 31st. If you plan to itemize, start rounding up your receipts for medical and dental costs, property taxes, charitable contributions, and other eligible expenses. Store all your tax documents in one place so it’s easy to find when you’re ready to file. Keep a copy of your tax return and any supporting documents for at least 3 years in case you get audited.
Complete a change of address form if you moved recently
Millions of Americans have moved due to the pandemic. If you recently relocated, complete a change of address form with your employer, USPS, and the IRS to make sure your tax documents get to your new location.
Review your filing status
There are five filing statuses: single, head of household, married filing joint, married filing separate and qualifying widow(er). Choosing the right one is important because it affects your filing requirements, tax rate, standard deduction amount and which tax credits and deductions you can claim. Generally, your marital status on December 31st determines your status for the year. However, there are some cases where you may have more than one choice. When you do your taxes with ezTaxReturn, they’ll help you choose the one that saves you the most money. So, you get the biggest possible refund.
Determine the best way to prepare your taxes
There are three ways to do your taxes: fill out a form 1040 by hand and mail it in, use tax software to file online or hire a tax preparer. If you just have a W2, doing your taxes yourself using a tax software program like ezTaxReturn.com is your best option. You don’t need to know anything about taxes because ezTaxReturn does all the hard work for you. They ask simple questions which you answer using the information from your tax documents. It’s that easy. Most people can e-file their return in just 30 minutes. Best of all, qualifying taxpayers can file their federal return for FREE.
Plan how you’ll spend your refund
Most taxpayers get a refund when they file, so start thinking about how you’ll spend yours. When you have a plan for your money, you’re less likely to waste it. Last season, the average refund was $2,535. Here are some smart things you can do with the cash.
- Pay off credit card debt
- Build your emergency fund
- Contribute to a Roth IRA
- Open a 529 account
- Start investing