If you usually receive a refund after filing your taxes, it’s a good bet you’re ready to jump out of the gate. No expected refund? You probably procrastinate. Whether you hurry or worry, the tax filing deadline waits for no one. Here are five ways to make the process hurt less.
1. Organize your receipts
For me, it started with a shoebox full of receipts. As our family – and businesses – grew, that shoebox was replaced with a stationery box, and finally a large copy paper box. File folders stuffed full of receipts for business and personal expenses can easily get out of hand. Not to mention fade to the point of being unreadable over time.
Taking a picture of your receipts with a smartphone is a good solution. But then, you’ll need an app to help organize those snaps. You might try adding a tax notebook to Evernote or using the scanning app Doxie.
There are some online digital solutions as well, if you don’t mind adding another monthly charge to your budget. Services such as (the aptly named) Shoeboxed or Expensify will take your receipts, scan them digitally, categorize them into tax categories for you and securely store your receipts in the cloud.
All of this effort can save you money. If you use a tax preparer, the more organized the financial data, the less time a preparer will spend in completing your return – and that usually means a lower fee.
2. Free File could be for you
You’ve got your receipts organized, gathered up your 1099s and/or W-2s and are ready to rock the 1040 dog. Or not. Your financial situation may simply require an EZ answer.
If you are a do-it-yourselfer and your income is below $58,000, the IRS has compiled a list of approved tax services which will allow you to file your return online at no charge. Free File provides all the tax prep you need to e-file your Form 1040, 1040-A or 1040-EZ return, plus related schedules.
If your income is higher, you can still file online but there will be a nominal fee.
3. Check your tax preparer’s qualifications
Maybe you want to give your shoebox o’ receipts to a professional and let them sort it out. There is certainly no lack of people looking to take on the challenge: from CPAs in office parks to tax preparers in strip centers. Tax preparation services even spring up this time of the year in crowded corners of big box discount stores.
You want every tax credit and deduction you deserve, so finding a competent preparer is important. Identity theft is a very real risk when outsourcing your tax preparation, as well. Make sure your return is completed by a qualified tax professional – that could include a Certified Public Accountant (CPA), Enrolled Agent (EA) or tax attorney. Professional tax services are also available from tax preparation firms that train their own employees and require continuing education. It’s a good idea to ask about the tax education and background of the preparer you’re considering.
A recent initiative by the IRS to establish “Registered Tax Return Preparer” regulatory and continuing education requirements has been challenged by the United States District Court for the District of Columbia. The IRS has filed an appeal in the matter but still requires all tax filing professionals to have at least an official Preparer Tax Identification Number (PTIN).
4. Don’t rush
Whether you take your taxes to a pro, DIY it with software like Turbotax, or Free File online, the best advice is: don’t wait until the last minute. Rushing to file a return can cost you money and delay a refund. Common errors include math mistakes, incorrect or missing Social Security numbers, and forgetting to sign your return.
5. And don’t guess, get help!
Completing a tax return doesn’t mean using “best-guess” estimates. If you are unsure about a tax matter and how it might impact the filing of an accurate return, get help. The IRS has live phone support and can even offer face-to-face assistance in some local offices. IRS.gov has many online resources, including guided assistance and live chat.
Hal Bundrick, NerdWallet