Preparing for Tax Season
It may be frigid outside now, but soon the snow will melt and spring will arrive. Along with flowers and sunshine, the approach of spring also brings with it tax season.
It may be frigid outside now, but soon the snow will melt and spring will arrive. Along with flowers and sunshine, the approach of spring also brings with it tax season. You don't have to wait for April to start working on your returns, however. In fact, you can start filing federal returns to the IRS on Jan. 19. There are advantages to getting your taxes done as quickly as possible, not the the least of which is having more free time once the temperature rises.
Look over some strategies to prepare for tax season so you can get started on your returns nice and early, as well as some benefits for filing early:
Keep all your tax documents in a central location
This is the time of the year when many of the important documents needed for tax filing start to arrive in the mail. In order to file taxes quickly and without any sort of delay, it is important to have them all close by. Create a location in your home where you will save the necessary tax forms that are delivered.
According to Bankrate, these tax forms include :
- W-2, from an employer
- 1099-INT, for interest on a bank account
- 1099-MISC, for self-employed individuals
Other forms may be sent your way, depending on how you spent and received money in the past year. Look for envelopes that state "Tax Documents Inside" on them.
Starting early means more time to find errors
The longer you wait to file, the busier experienced tax professionals will be. That may mean you're left to do your own taxes, which could be a problem if there's a mistake on any of the forms you were sent.
Look over every document you received to make sure it not only has all of your correct personal information - like name, address and Social Security number but the correct financial info as well. Any error could wind up costing you because there's a chance you could be paying taxes on income you never earned, U.S. News & World Report explained. If you spot a mistake, a business or bank can re-send you an updated form, but only if there's time to do so. Waiting until the last second could be problematic.
Early returns mean quicker refunds
Once you submit your tax returns, either electronically or through the mail, the IRS can begin processing your information and get going on sending you back whatever money it owes you. By getting a jump on your returns, the faster your refund check will arrive.
In fact, 90 percent of refunds are issued during a 21-day span , CNN reported. The other 10 percent often end up waiting weeks to get their money back, as the system is backed up with people filing. Jump the line and file early to get your money back quickly.
For any other questions about the upcoming tax season, contact a professional at Vectra Bank.