Top 10 Tax Preparation Tips from Collector Care

Top 10 Tax Prep Tips from Collector Care 

1. Start early. You’ll receive tax forms from employers and banking institutions by January 31. Begin gathering everything you’ll need to file as soon as possible.

2. Hire a professional organizer. If your home office is overflowing with paper clutter, hire an organizer to help you gather all your important documents and prepare your tax information to be sent to an accountant.

3. File free. If your income is less than $58,000 the IRS offers free tax preparation software.

4. Make a checklist. Include all the information and documents you need to gather like:

• Personal information and previous tax returns
• Information and income for everyone in your household
• Income from W-2 forms
• Self-employment income and expenses; 1099 and K-1 forms
• Education scholarships, loans and interest paid
• Divorce decree and alimony paid
• Vehicle expenses such as the cost of parking and tolls
• Income from rentals or other sources like unemployment, gambling, alimony, etc.
• Income from retirement, savings and investments

5. Itemize deductions only if it’s more beneficial than a standard deduction. If itemizing deductions, you’ll need:

• Form 1098 or other mortgage statements
• State and local income tax paid (other than wage withholding)
• Real estate and personal property tax records
• Invoice showing amount of vehicle sales tax paid
• HUD statement showing closing date of home purchase
• Cash amounts donated to charitable organizations
• Healthcare costs
• Expenses related to investments
• Job search costs and employment-related expenses

6. Avoid the top three most common tax errors:

1. Claiming incorrect estimated tax payments.
2. Deducting the wrong amount for the standard or itemized deductions.
3. Selecting the wrong amount of tax from the tax table on paper tax returns.

7. Can’t file by April 15? No problem. All taxpayers get an automatic six-month filing extension to October 15. The extension is only for filing tax returns and not for payment of any taxes that may be due. Be sure to pay the total tax due by April 15 to avoid penalties and interest.

8. Don’t miss out on a return because you moved. Each year, the U.S. Post Office returns millions of dollars in refund checks as undeliverable. This is generally because taxpayers moved after they filed their taxes. The post office does not forward refund checks. Notify the IRS immediately of a change of address.

9. When to expect your refund:

1. E-file return: Refunds are processed within seven to ten business days. Direct deposit refunds will reach your bank account within five to seven business days.
2. Paper return: Direct deposit refunds for paper returns are deposited in six to eight weeks.

10. Reinvest your refund. Instead of spending your refund check on department store sales, invest it in an IRA or deposit it in your savings account. Your future self will thank you. 

Do you need help getting your paperwork together? Hire a Collector Care Professional Organizer to help you get through the daunting task of going through all of and shredding your paperwork.  We will sit by your side and go through it all together, no joke. Is your garage packed with paperwork? Bring it on! We sort through paperwork in bulk regularly and we enjoy it. If your paperwork scares you - don't face it alone. 925-548-7750.