Completing your annual tax return won’t be counted among life’s most exciting tasks, but it’s necessary all the same. For some of us, the process even ends with a nice boost to our bank account in the form of a refund. No matter your tax bracket or means of filing, we’ve compiled a few tips to make your experience productive and, perhaps, even enjoyable!
How should you file?
Your filing status will help set the course for the rest of your tax journey. Whether you are filing as single, married filing jointly, married filing separately, or otherwise, this will determine what your standard deduction is, which credits you may qualify for, and how much you might owe the federal government. Some of these selections can make your process very simple, like filing if you’re single or married. Others, however, might require a little more due diligence. Do your research on each direction before you choose, as each status comes with pros, cons, and requirements.
Organization is key
Filing your taxes can be a very paperwork-heavy process, especially if you have special employment circumstances, you’ve recently moved, or have experienced another major change in the past 12 months. Documents you’ll want to keep an eye out for in the early months of each calendar year include W-2s, 1099s, and mortgage and investment income statements, among others, depending on your circumstances. If you are able to gather everything before you sit down to file, you’ll spend less time digging through desk drawers and file folders, further adding to any tax-driven anxiety you might be experiencing.
Should you look to a tax professional to complete and file your return?
The answer to this question completely depends on your preference and comfort level when it comes to tax preparation. Think of it this way: Some people enjoy do-it-yourself projects around their home, while others would rather outsource these time-intensive activities to a professional, who may also do a better job. Having confidence in crunching numbers and having a basic understanding of tax rules are good measures to use.
Luckily, Service CU is here to help if you would like a hand with your tax return this spring. If you file with TurboTax, available through Service CU online banking, they will offer you savings of up to $15 on federal tax products. Just log in at www.servicecu.org and click on the TurboTax banner in your online banking portal. Even better? If you’ve filed with TurboTax before, you can easily transfer 2019’s tax info – which ends up being a big help as you dig into this year’s return!
Meet the Deadlines
This one should be easy, right? Well, given that about 7 million Americans fail to even file require income tax returns each year, we thought this was worth mentioning:
File your taxes before Tax Day.
Failing to do so could lead to interest owed, and a steep penalty of up to 5% of your unpaid tax balance each month your return is late. Even worse? If you were owed a refund from the federal government, you’ll still pay penalties.
If you’re going to owe taxes, they must be paid by Wednesday, July 15, 2020.
As mentioned above, one of the most helpful things you can do is be organized. If it’s too late for you to accomplish this goal for 2019, do yourself a favor by saving this year’s tax forms, 2020 receipts, and any other applicable documents. A little extra work now can make next year’s filing a breeze! It’s also recommended to keep these documents on-hand for at least three years in case the IRS audits your tax returns.
Stay tuned for another blog later this month where we’ll discuss what you can (and should) do with that juicy tax refund from the federal government – if applicable, of course.