April 15th, otherwise own as Tax Day, is ever nearing. If you're one of the millions of Americans that has decided to put off your filing to closer to deadline day and are trying to jog your memory back into tax filing gear, no worries. That's what this entry is for. Simple reminders and some hints and possibly some unknown extension filing techniques will be listed below, to get you all the info you will need to file your taxes in easy (enough) fashion.
Let's see. How abouts we break this down into 5 easy steps? Here we go...STEP 1: Gather Thy Paperwork
Proper documentation gathering is paramount to making this filing process as streamlined and as painless as possible. You will need (at minimum) your social security card (or number memorized), all the employer sent documents you received such as any W4's and/or 1099 forms, also tax ID numbers might be needed as well. Lastly, any and all documents for any number of credits, additional earnings, deductions, etc that you plan to include in your return.
Many user on this site have already documented further understanding deductions you might not be aware of. I highly recommend referencing this entry:Commonly Overlooked Tax Deductions You Should Know AboutSTEP 2: Chose Your Method For Filing
There are 3 standard ways that most people chose to file their taxes every year: all by themselves, pay a tax professional of some sort, or use a tax filing software. All three are valid and the choice just comes down to personal preference and level of hassle you would like to invest. Also cost, least we forget.
---Paying a tax consultant/lawyer/pro, or whatever label they chose to dawn that makes them the expert, is a solid choice for least amount of stress. Just be sure to only go through with filing your taxes with a tax specialist you trust, and that you feel is doing everything in complete compliance with the tax code. Don't fall victim to the myth that whatever mistakes they make (come potential audit time) falls on them. The exact opposite is true. Make sure and triple check any work a tax pro does on your behalf, before you send it to the necessary federal and state filing institutions. And also, this is the most expensive route. So while it can be the easiest for sure, just be aware and be prepared to spend anywhere in the general neighborhood of $75-$175 per year of filing, depending upon how complicated your deductions, credits, etc are.
--Filing all by yourself is of course virtually free, but not for the lazy (like me). But if you are willing to do a bit of research on IRS.gov about all the credits, deductions, earnings reporting and various 1040 ins and outs, this can empower you to really understand the tax code quite well. And probably would not take more than a few afternoons of studying to be quite well learned indeed. My advice, if you simply have to file a W2, grab a 1040EZ file and do about an hour's worth of research. It's quite easy. For anything more difficult, consider doing at least one year with the other 2 options, take notes, and then possibly do it alone from that point on. Your call.
--And finally you can do what's become possibly the most popular route, tax filing software. TaxAct, TurboTax, H&R Block, TaxSlayer.. whatever software you chose (there are many others than just those 4 as well, by a ton) just shop around. Read user reviews and make sure that the software can most easily handle your particular situation. Some software is engineered specifically for simple w2 1040EZ filings, while others walk you through the intricacies of the full 1040. Reference - How To Know When To Use the 1040, 1040A or the 1040EZ Form
to determine what form you will need, and use that info to determine which software will best suite that need.STEP 3: File Your Prepared Taxes (With Your State As Well, If Necessary) By The Deadline
Straight forward here. Just make sure that once your taxes are prepared, no matter which of the 3 routes you landed on, that you file ALL the necessary paperwork and mail your forms to the correct IRS addresses by the April 15th deadline. I would advise not waiting until the final day to drop the forms in the mail, just to be sure to avoid penalties. Aim to have the IRS actually receive your forms ON April 15th, which means you should probably have them in the mail at least one week prior. That would be a good rule of thumb.
**And if you are going to owe for the year (for self-employed people such as myself) be sure and stay in communication with the IRS for payment arrangements, if you plan to make installments. Otherwise, make sure to send in your entire bill with your 1040 form.STEP 4: File 'Extension Of Time To File Your Tax Return' (up to 6 months, if needed)
This option can be incredibly helpful if you know (for whatever reason) that you will miss the deadline. Be aware that this does not give you extension to pay, if you owe, just to file. Here's how it works:Per IRS.gov:
Extensions for Individuals
If you are not able to file your federal individual income tax return by the due date, you may be able to get an automatic 6-month extension of time to file. To do so, you must file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return by the due date for filing your calendar year return (usually April 15) or fiscal year return. This form is also available en español.
Special rules may apply if you are:living outside the United States
out of the country when your 6-month extension expires, orserving in a combat zone or a qualified hazardous duty area
.STEP 5: Pay Attention, Take Notes, Be A Pro Next Tax Season!
All done. Steps 1-3 should be all you need to completely file your taxes. If you are 18, freshly employed and new to the game, take notes and next year your filing process will take a fraction of the time. Same can be said for even the seasoned filer; stay organized and remember the little tips and tricks that you use this year, and apply that to future filing years going forward. Hope this entry helps.