Before You File Your Taxes
If you are filing your taxes for the first time, then you may be wondering what to do. There are are several things you need to do before you file your taxes. Filing your taxes does not need to be an intimidating process, you really do not need to worry about a wide variety of forms and tax laws, since computer software can help to simplify the entire process. You need to make sure you have all of the information before you begin so you don't need to later.
Collect Your Tax Documents
Before you file you should collect your tax documents. You should have your W-2 from your employer. If you have worked more than one job during the year, then you should have a W-2 from each employer. Additionally, you should collect any 1099 forms that you may receive. Your bank is required to print one for more than ten dollars of interest earned. You may also receive 1099 forms if you have worked as an independent contractor during the last year. Companies are only required to mail a 1099 if you receive more than $600.00 from them during the year.
You must report any self-employment income you make over $400.00. If you are a student or recent grad, check out these tax tips before you file.
Can You File Yourself?
You have three options available to you in how you file your taxes. You can do it yourself using the forms, you can use software or you can go to an accountant or a tax preparation company. Generally, if you are single, renting, and work for a company you can simply file the 1040EZ. This form does not allow for itemized deductions. It is really easy to fill out and only takes a few minutes. The software can help you figure out any tax credits you qualify for.
Do You Need Help Filing?
If you are not sure if you have any deductions, you may want to use the computer software that is available. There are many different programs, which will take you step by step through the questions to determine the right software for you. Most tax places you will go to simply have someone fill out the questions on the computer as they talk to you. The software is a bit less expensive than a tax preparation business. If you have started your own business, are self-employed and are planning on itemizing business expenses you may be better off going to an accountant to file your taxes.
The refund process slows down the later you file your taxes. It is a good idea to file as soon as you receive all of your forms in the mail. You may want to wait until the first week of February to file, because businesses are required to mail the forms by January thirtieth each year. If you miss the deadline, you still need to file an extension by April 18th in 2017. The extension does have a fee attached to it, but you will save yourself a lot in penalties by filing the extension. When you file an extension, you will still need to pay the amount that you owe in taxes on time or you may face penalties.
When you file online you will save time, and receive confirmation that the IRS received your tax forms on time. Additionally, you will speed up the refund process because it takes less time for the IRS to receive your taxes. Even if you file your taxes with an accountant, they should be able to file your taxes online for you. Just ask.
Take Advantage of Direct Deposit
If you file for direct deposit, you will receive your refund much more quickly. When it comes time for your refund, you will need your account information, so that you can sign up for direct deposit. In order to do this you will need your bank’s routing number and your account number. Both of these numbers are available on your checks. It is important to only use your checks, since you bank may put a different routing number on your deposit slips.
Beware of Fast Pay Loan Options
With fast pay options also called Refund Anticipation loans, you will pay an exorbitant amount in fees and interest to receive your refund just a week faster than normal. With the ability to file online, and with the amount being direct deposited into your account, the estimated time to receive your refund is about ten days. This is a reasonable amount of time to wait. A little patience in the matter can save you hundreds of dollars.