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Tax season is officially upon us! As of January 27th, 2020, the IRS is accepting and processing returns for tax year 2019. This year, you will have until the April 15th deadline to get your materials in, but it’s always good to get a head start. After all, the earlier you file, the earlier you can receive any refund you may be owed! Here are some helpful tips to ensure a smooth tax-filing process.
Whether you file yourself or opt for a tax professional, you will want to gather some important documents before beginning. Some of the most common forms to assemble include:
- W-2s: If you’re an employee, your employer will give you a W-2 form. Employers are required by the IRS to deliver W-2s by January 31st. Lots of information from this form will go directly onto your tax return, such as wages earned and withholdings.
- 1099s: There are many different types of 1099s, and they cover nearly every other manner in which an individual makes money. This includes income from work as an independent contractor, investment income, interest income, cancellation of debt, and more. Information from a 1099 will also go directly to your tax return, just like a W-2.
- 1098s: Similar to 1099s, there are also a number of different 1098s. Instead of focusing on income, however, they provide important information for your tax return related to deductions. These include mortgage interest, charitable contributions, tuition fees, and student loan interest.
- Account statements: Year-end statements from your financial providers can help confirm the information on the documents listed above, as well as provide record of other expenses which can be deducted. Having these records is especially helpful for those who choose to itemize expenses, or in the case of an audit.
Again, as mentioned, it’s always a good idea to file sooner rather than later. If you’re owed a refund, it ensures an earlier delivery of funds from the IRS, and if you end up owing money it allows a longer time window for you to make payments. It’s worth pointing out that as part of their effort to reduce fraud and identity theft, the IRS can’t pay out refunds for filers claiming the Earned Income Tax Credit or Additional Child Tax Credit until February 15th. That doesn’t mean you should wait, however, as refunds for these filers will be sent out in the order they were received.
Tax season is also a great time to revisit your withholding allowances. After the passage of new tax laws, many Americans changed their withholding for tax year 2018. If you made changes this time last year, it’s worth reviewing to ensure your withholding helped meet your needs. If not, the beginning of the year is a convenient time to make any necessary changes.
Though it may be tempting to try and rush the task of filing taxes, it’s almost always in your best interest to wait until all your forms are in-hand. Once all your documents are in order, you can proceed with confidence. Taking the time to get all your ducks in a row before filing helps ensure accuracy, and therefore helps ensure no delays in hopefully receiving your greatly awaited refund!