It’s Tax Season! Its time to get out all the papers you have been shoving into boxes all year out and sort through them. (Unless of course you have been following this blog, in which case you are extremely prepared J)
Lets talk about the important stuff:
1) Know your important ID numbers: your own social security number, spouse and dependents ID numbers or social security numbers, important tax ID numbers from employers, employees or child care providers.
2) Its called “income taxes”. Think about what income you have and gather all the important data you will need to file. Your employer should send you a W2 or 1099 with your gross earnings. If you are self employed you will need evidence of your income and spending for the company, as well as for your employees to file.
3) Almost any income is taxable – including interest earned. Hang on to your financial statements so you know what you have accumulated over the last year in your savings/retirement/college/etc. accounts.
4) Deductions – make sure you prepare your costs for your home for tax deductions. Know what counts as a deduction and make sure to document what you have spent. Even the interest you pay on your mortgage is tax deductible. So are real estate taxes.
5) No good deed goes unpunished – in this case, your charitable donations and contributions count as tax deductions. Make sure to document all the contributions you made last year.
Now for the fun part!
You have all the data you need to file your taxes and the information that can help reduce your bill…. What to do next? Give yourself time to create an easy to manage filing system. Label. Label. Label. Make sure to categorize your income, donations, spending, etc. Put the year on each label – after this year is over it will make storing your files a breeze. Lastly, make sure to keep all of your tax documents in the same place – it will make your life much easier next time around.