Final stretch of the tax season!
It's that time of year again – tax time. No one likes paying taxes; however, the more prepared you are now, the fever surprises you'll experience come April 17th. Here are some practical tips to get you through tax season.
The Internal Revenue Code contains more than 1.4 million words, making it twice as long as the King James Bible.
Taking the Pain Out of Tax Time
Keep important receipts and information in an expandable folder, organized by month or activity, so you won't have to search for the information next year.
- Have a major life change in 2011, such as a new mortgage, marriage, divorce, or baby? You may need to file a new W-4.
- Donate to charity? Be sure to keep your receipts to claim the deduction on your taxes.
- Move? Update your mailing address with your employers, clients and institutions that hold your investments and bank accounts. If the forms have already been sent, contact the companies and ask them to send copies through the mail, fax or e-mail.
Individual taxpayers spend 3.5 billion hours each year doing their taxes.
- Create a tax checklist to gather all of the documents you'll need.
- Download the latest catalog of forms and publications from IRS.gov or have it mailed to you.
- Most tax software programs will allow you to input your information early. Start filling in your information ASAP, so that you're not rushing to complete it NOW.
- If you have a dependents, make sure you know their social security numbers, so that your return isn't delayed. If you are divorced, decide which parent will claim the children beforehand to prevent an audit or delay.
- You have until April 17, 2012 to contribute to your traditional IRA for 2011. Check the IRS website to see if you're eligible to deduct your contribution on your taxes.