Smart Tips for Tax Preparation

If you’re reading this between January 1 and mid-April, income tax season is upon you. The following tips can help you successfully navigate the ins and outs of tax preparation – either on your own or by partnering with a professional.

Get Organized

Give yourself plenty of time to get organized before filing your federal tax return or reaching out to a professional for assistance.

• Use a tax preparation checklist to make sure you have everything you need, such as your Social Security Number,  gross income or taxable income, tax deductions, contributions to your retirement plan and contribution limits, and capital gains if you hold investments.
• Save forms, donation receipts and other documents in separate folders.
• Keep track of tax deadlines.
• Have last year’s income tax return and tax documents handy for reference.
• Select software support such as TurboTax, or use a tax preparer if you want help preparing your taxes.

Selecting Software or a Tax Preparer? Do Your Homework

When choosing software or a paid preparer such as H&R Block, protect yourself by doing your research and asking yourself these questions:

• How much do I want to spend?
• Am I filing a tax form 1040EZ or tax form 1040?
• Am I filing in multiple states and need to consider different state returns or state taxes?
• Will I want help if I have questions completing my tax return?
• Will the tax preparer arrange for someone to accompany me to a meeting if I am audited?
• If I want 1-on-1 assistance (e.g., I am self-employed, am a small business owner or own certain investments), should I look into hiring a certified public accountant (CPA) or other tax pro?

Watch for Red Flags

Don’t hire a tax preparer if they:

• promise a tax refund before they have actually reviewed your tax information.
• guarantee an exact refund amount after only seeing your W-2 form.
• say their fee will be a fixed percentage of your projected refund.

File Your Tax Return

Even if you have assistance with tax prep, you may need to actually file your own taxes yourself. The IRS recommends filing your return electronically. You’ll get a refund faster using IRS Direct Deposit. The agency says it usually takes fewer than 21 days to receive your refund when you e-file and use direct deposit versus 6 weeks when you send the tax return by mail. If you owe money, use Direct Pay to send funds from your checking or savings account. Remember to keep a copy of your filed tax return.