There are some things that are fairly regular in the life of a young family. For example, the celebration of birthdays and a wedding anniversary, the first official lawn mowing, oil changes, and visits by family members. And there’s one other thing that comes on time each year — tax season. With tax filing, however, what gets filed may not be same as the year before.
With job changes, relocations, and the birth of additional children, your tax form can look different each year. In fact, you may have moved from filing out a simple 1040 to an itemized tax form. To make sure you get the maximum refund allotted to you, and to avoid potential audit issues, you need to make sure you’re as prepared as possible before you even put your name on the federal tax form. Here are a few things to consider.
Gather Your Tax Forms
Federal guidelines state that tax forms need to be delivered to employees and contractors by the end of January. Sometimes this is via regular mail, other times delivery is via email. Those who have investments in a home or stocks tend to pull their yearly interest and profit information from their bank or investment website. Should you not receive these in the allotted time, you may need to contact your financial provider for an update.
Maximize your IRA contributions
The end of the previous tax year doesn’t mean the end of the period for maximizing the contributions to your IRA. In fact, you can maximize the funds in this type of investment account all the way up to the filing deadline of April 15th. The top off of this investment fund could help the bottom line in filing your taxes. The only downside is you won’t be able to file your taxes and receive any potential refund until the last possible moment.
Pull Your Home Office Receipts
There may be more expenses or reductions in your tax filing should you have a secondary freelance job. First, money you make from this job will be taxable. Second, the expenses accrued in the position may be deducted from your taxes depending on how much money you made. Items like mileage, office furniture, and depreciation of other products in the course of your freelance position can help reduce what you owe.
Check Your Donations
Most people think all donations to places like churches and Goodwill-type thrift stores are tax deductible. This isn’t true. You can certainly deduct any money or items given to places like Goodwill or Arc. In fact, computer programs like TurboTax offer handy online worksheets and tax calculators that calculate the value of your donations. On the other hand, donations to other non-profit organizations may not be tax deductible. Best recommendation is to read information about their donation policies in order to determine tax status.