Nobody enjoys completing their tax assessment forms. We put them off and put them off until they cannot be ignored any longer.
If you, like many Americans, leave your taxes until the last possible minute, then rush through them to file before the deadline, these 8 time-saving tips for doing your tax assessment forms will be a blessing.
1. Have the Information Ready
When you go to file your taxes, you will need to quickly access details about your income and finances. Before you sit down, ensure you have the following within easy reach to avoid spending time hunting around for the relevant information:
- Social security number
- W-2 forms
- 1099 forms
- Retirement account contributions
- Educational expenses
- Unreimbursed medical bills
- Property taxes and mortgage documents
- Charitable donations
- Classroom expenses
- State and local taxes
- Last year’s federal and state tax returns
2. Have the Right Forms
Again, failure to adequately prepare will lead to time wasted looking for the correct documents. Ensure you have the 1040 form. This is the form that everyone has to fill out to calculate their federal taxes. The additional forms required will depend on your personal financial circumstances.
3. Hire a Professional
Start a tax assessment with a professional assistance to expedite the process and ensure you are completing the right forms, with the right information, the first time around. If you have a side business or don’t know what forms you need to complete, you might want to consider hiring a professional to help you untangle your taxable income.
4. Don’t Get Ahead of Yourself
While a professional can save you time on your tax assessment, don’t base your decision purely on the professional offering the biggest refund. If the professional is offering something that sounds too good to be true, it probably is. If your tax professional makes a mistake or uses overly aggressive accounting strategies, you could be hit with serious penalties. Choose an established professional with a reputation for excellence.
5. Prepare Throughout the Year
If you miss the April deadline, the IRS will charge you interest on your outstanding tax bill. This can be as much as 6%. They can also slap a penalty on for late payments. This could be to the tune of 0.5%, so it is best to make preparations well before the deadline.
6. File A 4868 If You Are Going to Miss the Deadline
It is possible to secure an extension on your tax return. If you file a 4868 extension form, you will be granted additional time to file your taxes. However, be aware that the extension is on the filing deadline, not the payment deadline. To avoid late payment charges, it is best to roughly calculate what you owe and send a payment along with your 4868 form.
7. Check Your Math
If you are completing your own assessment, it pays to spend a few extra minutes checking your math. If you make a mistake, you will have to invest more time down the road filling out forms, making payments and remedying the situation. Taking the time before you file to check everything could save you a lot of time later on.
8. Check Your Bank Details
You would be surprised how many people fall at the last hurdle when completing their tax assessment. If you don’t provide the right bank details, you won’t receive any money. It is as simple as that. Check, then double-checkhe figures to ensure everything is as it should be.