The middle of April brings a sense of dread for many people, and a sense of relief for others. Yes, smack dab in the middle of refreshing warm weather and blooming trees is the deadline for filing your income taxes. Some people look forward to getting a nice refund, while others may owe Uncle Sam a bit extra based on what they made over the past year. But one thing is for sure—being prepared long before the day arrives makes it go much more smoothly no matter what your tax outlook.
When you prepare to file taxes, the first step is to simply gather important records. The most important of these are W-2 forms, which you should receive from your employer either in the mail or via an online PDF printout. If you’re an independent contractor or not employed by a company in the traditional sense, you may need to fill out a 1099 form instead. Either way, these forms contain all the relevant information about the past year of employment, such as total earnings and withholding status.
Next, decide if you’ll use tax software like TurboTax, or enlist the help of private accountant or a tax service like H&R Block. These options have definite pros and cons. Filing by yourself can save you money, but it requires time and effort, and you may miss certain important deductions, which can cost more money in the long run. Tax software can streamline the process, but for taxpayers with large families, people who own a business or work from home, hiring a tax professional may be the best option.
Once you’ve made a decision on which route to take, it’s time to get the work done. Allow yourself—or your tax professional—ample time to complete the tax return. In other words, don’t wait until the night before! Once it is completed, take the time to look it over carefully. Are there any errors? Keep in mind that even tax professionals make mistakes from time to time—especially when they are under pressure as the deadline approaches—and a single mistake could end up costing you big money.