7 Tips For Last Minute Tax Filers

Time to stop dragging your feet and get on the ball!? But you knew that already.? I?m as guilty as any, that sometimes when there?s so much to do and remember I just put it off to think about later.? However, the margin for procrastination is dwindling so let?s knock this thing out.? Often times all you need to get in gear is to organize your thoughts, so here?s a quick reference to get you going.

What You Need

Personal Information:

• Social Security Numbers for yourself, spouse, and dependents
• Bank account information (for direct deposit)

Income Information:

• Employment income ? W-2 forms
• Investment income ? 1099 forms, stock option information
• Self-Employed Business income ? profit/ loss statement and capital equipment information, 1099-MISC forms, home office info (if applicable)
• IRA, Pension, or Annuity income ? 1099-R forms
• Social Security income ? SSA-1099 forms
• Rental Property income ? profit/loss statement
• Real Estate sale income ? original cost, improvement costs, escrow closing statement, cancellation of debt information
• Stock and other property sale income ? 1099-B forms, cost basis information
• Alimony income
• State/Local refund income ? 1099-G forms
• Unemployment income ? 1099-G forms
• Miscellaneous income ? jury duty, medical savings account, gambling winnings, etc.

Standard Deduction vs. Itemized Deductions

Many people choose to take the standard deduction allowable by the IRS rather than itemize their deductions.? It certainly saves you a lot of time and hassle; and for many people it means a lower tax bill!? For tax year 2011, the standard deduction if you?re single (or married filing separately) is $5,800.? If you?re married (filing jointly), its $11,600.? The standard deduction is higher if you?re blind or 65+ years old.? You should only itemize if the total of your itemized deductions exceeds your standard deduction.

Itemized Deductions

Below is a list of expenses that can be itemized.? If itemizing, be sure to collect all documentation of the amounts paid toward these expenses.

• Medical /Dental expenses
• State/Local Income Tax paid (other than wage withholding)
• Taxes Paid on Real Estate and Personal Property
• Mortgage interest and points paid (will need 1098 forms, HUD statement from closing)
• Investment interest expense
• Student loan interest expense
• Charitable contributions (cash or property donated, miles driven for charitable purposes)
• Casualty and Theft losses (will need amount of damage, insurance reimbursements)
• Unreimbursed Employee expenses (union dues, travel, uniforms, seminars, etc.)
• Job Search expenses (if new job is in the same occupation)
• Tax Preparation expenses (from 2010)

Tax Credits

While deductions reduce the amount of income on which you are taxed, tax credits are directly applied to your tax bill, reducing the amount of tax you owe.? Some are even ?refundable?, meaning if it brings your tax bill below zero you can receive a refund.? ?Nonrefundable? credits can bring your bill to zero, but no further.? Below is a list of some of the most common tax credits.? Be sure to collect all of the necessary documentation to utilize any of these.

Non-refundable:

• Retirement Savings Contribution Credit ?? a portion of an individual?s qualified retirement contributions
• Child Tax Credit ? per dependent under the age of 17
• Education Credits ? The American Opportunity Credit is a for post-secondary education expenses (higher available credit and partially refundable); The Lifetime Learning Credit is for students ineligible for the American Opportunity Credit.
• Foreign Income Tax Credit ? reduces the tax burden on income from foreign sources also taxed by the originating country
• Child and Dependent Care Tax Credit ? offsets expenses for children under 13 or a disabled spouse or dependent, so the taxpayer can work
• Residential Energy Tax Credits ? The Non-business Energy Property Credit is for energy-efficient improvements made to your home; The Residential Energy-Efficient Property Credit is for investments in alternative energy.

Refundable:

• Earned Income Tax Credit ? for low income individuals and families
• Adoption Tax Credit ? qualified expenses associated with adopting a child
• Social Security Tax Credit ? excess withholding can be recovered
• Alternative Minimum Tax Credit ? if you previously paid AMT tax but not this year
• First-Time Home Buyer Credit ? actually an interest free loan, repayable to the IRS

Ways to File

There is always the option of hiring an accountant or walking into your neighborhood tax preparation business, but there are free options as well.? You can file your taxes electronically for free using one of many online services available.? See a list on the IRS website at:? http://apps.irs.gov/app/freeFile/jsp/index.jsp?ck

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Sources:

Turbo Tax

IRS

Source: http://www.girlsjustwannahavefunds.com/last-minute-tax-filers

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