Tax Day is coming upon us if you haven’t filed your Taxes and planning to pull “filing all-nighter.” These 5 helpful tips to do your own taxes will make it easier for you:
Find out if you actually need to file
You can use the IRS’s online Interactive Tax Assistant. That means you need to answer a few basic questions about your Filing Status, gross income and whether you had federal income tax withheld. You can use a tax-filing software or hire a professional, either way, make sure that you need to file.
What’s your filing status?
Are you single, married or separated? Your filing status is based on what your marital status was on Dec. 31, 2016, and it applies to all of the tax year 2016. There are five possibilities:
– Single
– Married filing jointly
– Married filing separately
– Head of household
– Qualifying widow(er) with dependent child
If you legitimately fit into more than one category, pick the one that requires you to pay the least amount of taxes.
Gather your documents and review your 2015 documents
Starting the process of preparing your tax return might seem overwhelming. The first step is to collect all the data that applies to your situation.
You need yours, your spouse’s and dependents social security numbers also, you need all of your income information: W-2 forms and 1099 in case you’re an independent contractor.
Finally, if you itemize your deductions or receive tax credits, you might need forms such as 1098 (mortgage interest); 1099-LTC (long-term care benefits); 1099-SA (HSA/MSA distribution); 1095-A (insurance marketplace statement); 1095-B (health coverage); 1095-C (employer-provided insurance coverage). You’ll also need any personal receipts for expenses such as charitable contributions, unreimbursed employer business expenses, medical expenses and moving expenses. Also, have your last year’s return handy, you might need it.
Know your expenses and what you can deduct
If you just purchased a home and have a mortgage. If you, your spouse or dependents had higher education costs in 2016, there may be some tax savings for you. Also, your charitable donations and home office expenses.
If you itemize deductions, make sure the items you claim are deductible. Here’s a list of some nondeductible expenses:
-Adoption fees (although you might be eligible for an adoption credit)
-Broker’s commissions
-Burial or funeral expenses, including the cost of a cemetery lot
-Club dues
-Fees and licenses, such as car licenses, marriage licenses, and dog tags
-Fines and penalties, such as parking tickets
-Health spa expenses
-Hobby losses (although certain hobby expenses might be deductible)
-Home repairs, insurance, and rent
-Home security system
-Illegal bribes and kickbacks
-Losses from the sale of your home, furniture, personal car, etc.
-Lost or misplaced cash or property
-Lunches with co-workers
-Meals while working late
-Personal, living, or family expenses
-Professional accreditation fees
-Professional reputation management, costs to improve it.
Know your deadline and don’t miss it
Tax Day is April 18 this year, in case you need to file for an extension check out our guide and Ask a Lawyer in case you have any concerns.
Do you have any questions? Share them in the comments!
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