Tax time is almost here and now is the perfect time to begin gathering your documents so you are organized well ahead of time. We understand how stressful it can be to sort through all the different tax information every year and the quickly growing tax code makes it even harder to get your returns filed in an efficient manner.
However, here are some expert tax tips for 2015 that are sure to help you get prepared for tax time and avoid paying a big tax bill.
Trying to fit everything in at the last possible moment is never a good idea when it comes to filing your taxes. If you take the time to get organized now, it will not only save you time later, it will also save you from making costly mistakes on your tax return that can lead to large penalties and fees. Besides making costly mistakes, the stress that comes with filing taxes is bad enough under normal circumstances. Waiting until the last minute to get things down can make the stress levels downright unbearable and this is just not necessary.
Step 1: Gather all of your receipts, documents, and income information. Sort through all the various documents and organize them in a way that makes it easy for you to find information quickly.
Step 2: Do a little research ahead of time about any issues that you might think are problems or you are unsure about. Reading through general tax information about the subject can uncover important details that you might not be aware of.
Step 3: Download all the necessary tax forms needed to file your return and make yourself familiar with all of them by reviewing each one.
Step 4: Select an automated tax software service to help you through the tax filing process.
Step 5: Create your account with the automated tax software service and get started early!
While finishing your taxes is never easy, if you follow the five steps above it will help you avoid scrambling at the last minute to get your taxes in before midnight on April 15. Keepings things simple, organized and unrushed is always important when filing tax returns and ensuring they are accurate.
It can sometimes be tempting to skip itemizing deductions in order to save time on filing your taxes. Even if you think your situation is relatively simple, itemizing deductions is an important part of reducing your overall taxable income. Many people don’t understand that there are many deductions you can only receive credit for if you itemize, such as your contributions to charities.
Tax time comes every single year, unfortunately. It is important to keep a list of topics or areas that created a problem for you this year so you can take the time to investigate the problem and find a good solution before tax time rolls around again next year. This will keep you well ahead of the game and avoid stressful last minute situations.
If you do this over the course of several years, before you know it you have a system down and know the ins and outs of your situation well enough to get things done in a very efficient manner without stress.
Every year we hear about tax scams that steal people’s money and private information so it is especially important to be vigilant around tax time in avoiding anything that sounds like it might be too good to be true. Stick with services that have an established website and a reputation that has been earned over several years. If a service is new or difficult to find information about then it may be best to look for a more established provider. Do not ever give out personal information or give information out over the phone to someone that randomly calls you claiming to be the IRS. The IRS almost never calls you unless there has been previous contact and you have some type of audit or other situation that is active.
New rules make it a requirement to disclose any foreign financial accounts that have the equivalent of $10,000 in them. The actual due date for this is June 30th of every year via the Foreign Bank Account Reporting Rules but tax time is a perfect time to take care of it as there are big penalties for those who do not disclose.
Don’t forget to report any gifts you made throughout the year. The annual allowed exclusion is $14,000 per individual or $28,000 per couple for 2015. If you exceeded these amounts then you will need to file a gift tax return as well. Gift tax exclusions are one of the items that can trigger an audit if not handled properly so it is important to make sure you get this right on your taxes.
Bitcoin and other virtual currencies are no longer hidden from the IRS and they consider these currencies real taxable property if transactions have taken place. Income paid in any type of virtual currency is taxable and subject to all the payroll taxes and other variables just like writing a check. Escaping a tax bill by using virtual currencies is no longer possible and transactions must be included in your tax return for 2015.
For many years IRA rollovers had very few limitations and you could actually use an indirect rollover to withdraw money from your IRA account for up to 60 days without any penalties or taxes generated. However, that has now changed as of last year. Starting in 2015, you can now only make direct rollover per year from your current IRA.
If you have a 401K, IRA, SEP or other retirement plans available then now is a perfect time to make any contributions that are needed before the end of the tax year. Maximizing deductible contributions can significantly reduce your taxable income and is a great way to lower your tax bill.
Most of the time, mortgage interest and interest on other types of loans can be tax deductible. Therefore, it is a good idea to review what loans you have outstanding and gather the information on how much in interest you have paid throughout the year. This can be a large amount and can help significantly reduce any taxes owed.
Form 1095 will give you the necessary information about your health insurance policy that is needed to file your taxes. It shows how many months of the year you maintained coverage and the type of coverage that your policy included. The new healthcare insurance rules have many requirements for the type of coverage that is considered “qualified” and it is important to know the details of your policy or face paying large penalties.
Choose an automated tax software service that is easy to use and accurate. The service should offer you lots of supporting information, quality software and a reasonable price to make the tax filing process easier. Create an account early and begin loading in the required information ahead of time. This will avoid last minute hassles and the pressure of rushed tax filings on April 14th.
Getting your taxes done is never easy, but if you follow the 12 tips above it will make things at least a little easier. We have a huge amount of information about different tax topics on our website including the Affordable Care Act 2015 tax penalties, self-employed tax topics, general tax research for W-2 employees and many others. Feel free to browse through our site and use all the resources we provide at no cost to you. When you are ready, we also have a quick, accurate and easy to use tax software service that can help you through the tax filing process for 2015.
www.ivdgl.org looks forward to serving all of your needs and taking the stress out of filing your taxes in 2015 and beyond.