Tax filing can sometimes be a headache, especially in 2020, where there are tax breaks on employment and people are filing for their missing stimulus checks. People who work two jobs, those that receive government aid and those that receive employment benefits, find filing their taxes a bit complicated.
Preparing early for tax returns can save you quite a substantial amount of time and money. Having a practical tax planning program allows one to file their returns on time. Here are five ways in which one can tackle their taxes on time.
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1- Set-Up with IRS An Online Tax Account
Since the beginning of the covid-19 outbreak, IRS suspended and disabled their walk-in services as well as their toll-free number. For one to file their taxes on time, taxpayers need to set up an online account. This is a simplified way of obtaining your previous year’s tax documents and obtaining the necessary records required.
Organizing Your Financial Records and Tax Documents
The filling process is made easier and faster by the prior preparation of financial records and tax documents. One can also log on to their tax software provider or the IRS online portal and request their previous year’s tax returns. This will act as a starting point and ensure that one has the documentation required to complete your tax returns this year, like your previous deductions, incomes, and credits.
2- Saving All Tax-Related Paperwork All Year Long
Saving up and keeping organized all the paperwork that requires filing is very important; student loan statements, grants, investments receipts, medical bills, and work-related expenses make the process easier. The IRS recommends that records be kept for at least three years, even after filing the paperwork
3- Keeping Tabs on What Deductions and Credits One Is Eligible For.
When a person knows the deductions and credits they are eligible for, they can put together all the proper documentation, making it easier to file taxes on time. These credits and deductions include savers credit, charitable deductions, student loan interest, and freelance expenses.
4- Being Aware of Deadlines
Gathering and organizing all tax documents two months before the tax return due date allows one to timely file their tax returns and avoid tax-related identity theft. Filling taxes early also enough allows one to get refunds on time.
5- Explore Different Ways of Filing Your Returns
IRS has a tax return free file program, a partnership between the providers of the online tax software and IRS. Those eligible for the free file program must have an adjusted gross income of less than $72000, the total income after deductions. The eligibility rate for all taxpayers stands at 70%.
This program began in 2001, but it’s not advertised because it’s a service donated by online tax software providers. This program also has a volunteer income tax assistance (VITA) program which assists qualified taxpayers by free tax preparation. People who speak limited English and those that earn less than $57,000 are eligible for such assistance.
Having this kind of information allows one to make the right decision, have the right documentation and receive assistance on time before the tax return date deadlines.