The earlier you file your taxes, the sooner you get your return
February 9, 2010 by Taxcut Editor
Filed under Personal and Business Taxes
Tax time coming soon
One of the easiest ways to find money now is to get a jump on filing income taxes. Many consumers wait until April to start gathering their paperwork together. They bring them to their tax preparer and want a rush job. The problem with waiting is that it opens the door for mistakes and it makes the time to get a refund that much longer. Anyone wanting to get the jump on filing, here are some tips.
Getting the jump on taxes
The first thing taxpayers need to be aware of is Schedule M. Schedule M is a new tax document that is used to account for the “Making Work Pay” credit money received on paychecks. The new payroll tables from last year that put an extra $ 400 in the pockets of single people or $ 800 for married couples filing jointly. For some taxpayers, however, they may have paid too much into the fund. To correct the over taxation, consumers have to file a Schedule M.
Secondly, you have to get your paperwork together. January to mid-February is when W-2s and other tax-related documents start coming in. Consumers should create a special place for all tax documents. The requisite information for these documents and getting it all together at once will make it easier to finish tax paperwork.
Thirdly, you have to double check things like social security numbers. Though it sounds rudimentary, there are a surprising number of tax returns received without the correct numbers. It holds up processing and refunds for thousands of filers. The correct number is critical, because a lot of transactions are directly tied to them. Everything from income statements to retirement plan contributions are recorded based on the social security number.
Fourthly, you need to know what filing package is the best to get. The IRS package is based on the filing history of a taxpayer, but that can change. Many documents are accessible online or at the library of post office. For taxpayers who had a major change, like marriage, it’s important to find the right documentation. Married couples looking for money now have to file with the right documents and in the right way.
Fifthly, think about electronic filing. Studies have shown that last year about two-thirds of all taxpayers filed electronically. The IRS processed E filed tax returns 50% faster than paper returns. Many of the software programs have a review function, where the return is double checked for innaccuracies and errors. The good news for E-filers is that taxpayers may qualify to file for free. Taxpayers this year with adjusted gross income of $ 57,000 or less for 2009, can file for free thanks to a cooperative program between tax software companies and the IRS.
Finally, taxpayers can elect direct deposit. A paper return takes weeks to get to the IRS, get processed, and a check to be cut and then sent. Conversely, it usually takes 10 to 14 days for a direct deposit to get to a bank account. Taxpayers that desire direct deposit have to file Form 8888, but it speeds up the process.
Filing in 2010
Now more than ever, filing tax returns is being made simpler and simpler for taxpayers. Those who want their tax return money now should follow the above tips to speed the process up. There are millions of tax returns that have to be reviewed and consumers looking for quick ways to file should use every advantage available.
Related posts
8 Things to Double Check Before Sending Your ‘08 Tax Return
October 15, 2009 by taxman
Filed under IRS News Items
The deadline to file your 2008 tax return without penalty is Thursday, October 15th. Here’s eight things you should double-check before signing your 2008 return.
1. Check if you’re eligible for the recovery rebate credit. This is a one-time-only tax credit available for people who did not receive their economic stimulus payment in mid-2008. Most tax software programs have a worksheet for you to fill out to see if you’re eligible for the recovery rebate. To use these worksheets, you’ll first need to know how much of the stimulus payment you received. The IRS mailed out reminder notices earlier this year. You can also check on the IRS Web site at How Much Was My 2008 Stimulus Payment?
2. Review your standard deduction or itemized deductions. For 2008 (and 2009) homeowners can take an extra standard deduction for property taxes. If your itemized deductions are only slightly more than your standard deduction, it might make sense to take the standard deduction with the additional amount for property tax, and this in turn can make your state tax refund into non-taxable income for 2009.
3. Review your estimated tax payments and extension payments. If you don’t have canceled checks or payment confirmation receipts, you might want to call the IRS at 1-800-829-1040 to ask them to verify the payments that were posted towards your 2008 taxes.
4. Be sure you have all your tax documents, such as W-2s, 1099s, 1098 mortgage statements, and so forth. If you are missing copies of any documents, ask your employer, bank or broker to send you a copy. Or better yet, many financial institutions provide these documents through their Web sites. If you are still missing some documents, call or visit the IRS and ask them for a printout.
5. Self-employed persons should review whether funding a SEP-IRA retroactively for 2008 will yield any tax savings.
6. Investors should review their capital losses carried over from 2007 and make a note of capital losses to be carried over to 2009.
7. Homeowner who are paying mortgage insurance premiums may be able to deduct those premiums as an itemized deduction. These premiums are listed on Form 1098 from your lender.
8. People who have bought a house in 2009 should review whether it will be more beneficial to claim the first-time homebuyer tax credit on their 2008 return or wait to claim it on their 2009 return.
Better Business Award GOLD Star to New Century Tax Consultants, our team of Expert Attorneys, CPA's, and Tax Practitioners.
The Taxcut Editor recently visited the Green Festival in Denver, see what he had to say.
