After many years of having the “tax day” creep up on me, I have finally found a few great guidelines to handling the last minute rush.
1) GATHER THE FORMS YOU NEED. You can get them here. Or you can go to the post office or, if you are using Turbo Tax, the forms are supplied with the program.
2) GET ALL YOUR PAPERWORK TOGETHER IN ADVANCE. This includes W-2 and 1099 forms. If you have not received them by January 31, call your company. Don’t forget to save a copy for your files.
3) ITEMIZE YOUR DEDUCTIONS. Go through your receipts for the year’s expenses. This includes clothing and other items donated to charitable organizations, medical expenses, state and city taxes paid, mortgage interest and cell phone used for business. You can also deduct job-related expenses such as classes, training or books. If you are looking for a job, chances are you racked up expenses from the job search (resume printing, copies, and travel to interviews) – these are considered tax deductions.
4) CONSIDER E-FILING. Three great reasons: It provides a confirmation as soon as your return is received, it delivers your refund faster and there is no chance for your tax return to “get lost in the mail.” This website lists the partners recommended by the IRS for easy online filing.
5) ANY LOSSES FROM LAST YEAR? You are eligible for a deduction of up to $3,000 in net capital losses per year. Don’t forget to carry over losses from last year (up to $3,000 per year).
6) CONTRIBUTE TO YOUR IRA FOR 2003. You have until April 15 to contribute up to $4,000 to your Traditional or ROTH IRA, for the previous year. It helps plan for your retirement and may save you money on your taxes. While you are at it, contribute for the current year as well.
7) EXPECTING A REFUND? File as early as possible. Why should the government keep your money interest free for an entire year?
8) CUT YOUR TAXABLE INCOME. The main way to do this is by investing in an employer sponsored retirement plan (401(k)) or self-employed plan (SEP, SIMPLE).
