Gather those receipts & tax forms….
According to the IRS, there are 2 groups of filers – those who get their returns in as soon as they have their W-2′s & 1099′s and those who file at the ‘last minute’. Interestingly many of the ‘last minute’ filers have money coming back but do not have their records organized and feel overwhelmed by the process. According to the Consumer Reports National Research Center, only 40% of Americans think they can find a document at a moment’s notice.
Tips to get & keep you organized:
• Have one place to put all those tax related papers & receipts.
Envelope, accordion file, box etc – Watch Mary’s interview with TV13 http://bit.ly/cALNeN
• Using software to track your expenses & balances like MS Money, Quicken, Quick Books etc is great at helping you sort your tax related expenditures but you still need to keep track of your physical receipts.
• Can’t remember all the things you did or might need this year? Pull out last year’s income tax forms to review & refresh.
• If you are going to work with a tax preparer, write a list of questions before your meeting so you don’t waste time or forget anything.
• Depending on your particular situation don’t forget the following documents:
Mortgage interest paid
Property tax paid
License plate fees
1099 interest & dividends
Mileage ($.50 per mile business, $.14 for medical & volunteer work)
Non cash & cash donations
Self employment expenses including home office deductions if applicable
Medical expenses & health insurance (can be used if over 7.5% of AGI).
• So how long do I need to keep all this stuff???
Rule of thumb 7 years for most everything – check out the suggested retention schedule provided by Baker, Spindler & Holtz http://bit.ly/bjnbpT
To help avoid identity theft, shred information that contains your personal information.
Something new this year: Financial donations for Haiti dated between January 11, 2010 and March 1, 2010 can be claimed on your 2009 taxes.
Hope these tips & reminders help! If you typically wait until the last minute, get rid of the stress & start on those taxes now. You can also go to irs.gov for help & if you make less than $57,000 AGI, you may qualify for free tax prep & filing. Learn more at irs.gov