BOSTON (CBS) – The tax information has begun to arrive.
Open those envelopes! If you don’t, you won’t know if you are missing any pertinent information. Look for 1099s from your mutual fund companies, banks, clients, Social Security and pension providers. Your Mortgage Company will send you a 1098.
Check to be sure your W-2s have arrived and they are correct. If not, call your employer and ask that another be sent out. Be sure they have your correct address.
If any of them are incorrect get it straightened out. The payer has until the end of February to send their copies of that information to the IRS.
If you use software such as Quicken, gathering your tax information will be easy. You can print out your tax reports such as the amount you paid in medical expenses, real estate taxes or contributions. You can also import information from Quicken to Turbo Tax. There are tutorials that can help.
Almost 132 million tax returns were e-filed last year. And of that number over 53 million taxpayers prepared and e-filed their own taxes. Using tax prep software does make the job really easy. You just keep answering the questions they ask and before you know it the tax return is done.
But you should have some knowledge about the kinds of things you will need before you start the process. And you will need to organize all of your information before you start.
- What’s your filing status? Single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with dependent child.
- Social Security numbers for everyone on your tax return
- Birth dates for everyone on your tax return
- Gather your W-2s, W-2Gs (for your Power Ball winnings), 1099s. These provide proof of income and taxes paid.
- Proof of any tax credits, tax deductions, or tax exclusions
- Proof of health insurance
- If you think you are going to get a refund your banking info for direct deposit
Haul out last year’s tax return and review it before you start the process for this year.
One more thing: Art Ford who is an accountant & CFP sent this ditty out about a magical box to his clients. If you follow his instructions life will be so much easier when you go to file your taxes.
This time of year there are many stories of missing tax information –tired and misunderstood CPAs -too numerous to detail –a way to deal with this is the Magical Box.
As year-end approaches, you have an opportunity to adopt this Magical way of keeping and retaining your tax information.
This requires no training –you do not have to take a course –
Purchase a new pair of shoes or boots –
Wear the shoes
Keep the box
You can decorate the box to your taste
As your tax information arrives –put that in the box
Repeat as needed
In February you will open the box and magically you will see your tax information
It is well known people using the box are much happier
Incidence of divorce is much less
If by chance you do get divorced –sorry –but keep the box
If you are going to go it alone request IRS publication 17. It’s over 300 pages. Request the IRS send you a copy. (800.829.3676). It’s a good read for it has everything you need to know about changes in the tax laws for 2016 that will affect your tax return. It’s easy but tedious reading.
You are going to need to organize this stuff whether you do the taxes yourself or hire someone else to do them for you. Even if you hire someone you should understand your taxes and review the information carefully before you sign that return.
You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m., 3:55 p.m., and 7:55 p.m.
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