by Jessica Grayless
Income tax filing is one of those responsibilities that is right up there with cleaning the attic and getting that root canal you've been putting off for six months. As they say, the two most constant things about life are death and taxes. Most of us have to do it every year, so why is it the thought of tax return filing fill so many of us with anxiety or even dread?
First of all, your taxes will be much easier to deal with each year if you have done your preparation throughout the year. If you are not an organized person, this might be one area where you have to give in and actually plan. You need to keep and file any important paperwork associated with filing your taxes. This includes paycheck stubs, mortgage information, 401Ks and other retirement accounts, any real estate or stocks and bonds investments, etc. If you own a small business, you'll need to be even more organized. You'll need inventory records, payroll records, records for all income and expenses, and a list of business assets, such as computers, furniture, etc. If you come up with a filing system now for this information, tax time won't be so stressful.
Second, be aware of the tax deadline. Of course, most people know that April 15th is the personal income tax deadline, but for some reason, it still sneaks up on many of us before we know it. For this reason, start early. In January, go through your records you've been keeping and make sure you have the things you need. By the first or middle of February, you should have received in the mail any W-2s for employment, 1099 forms for contract work, mortgage interest statements, student loan interest statements, bank and investment account statements, and any other types of information. If you have not received any of these expected statements from an employer or mortgage company, start making the phone calls now to track down the information.
Once you have all of the records that you think you'll need for your taxes, then comes the decision of how to file. You need to realize that despite the tax code being larger and more complicated than the main reactor in a nuclear power plant, there is plenty of help and resources available out there for you. You can pay a CPA or a firm like H&R Block to handle your tax filing for you. There are plenty of reputable companies that offer online tax filing and free tax filing for certain income brackets. You can even do your taxes yourself to save money, but just make sure you have read the IRS instructions for all of the forms before you begin. With taxes, you'll not only need to re-check your work, but re-check it again. Electronic tax filing is much faster and can reduce common errors found in paper filing. Again, most CPAs, traditional tax companies, and online tax providers offer electronic filing.
Income tax filing will never be as fun as, say, a trip to the local amusement park or a vacation to Hawaii, but it doesn't have to be feared like the Grim Reaper, either, if you are organized, aware of the filing deadlines, and know the resources available to help you when April starts looming on the calendar's horizon.