Pain free tax filing [Infographic]
With tax season rapidly approaching April 15 never seems far off many Americans will scramble to get all of their financial information and documentation in one place. It can be a difficult process, but the earlier you have your fiscal documentation in order, the easier it is to file taxes and avoid any potential problems. Prepping early in the year also gives you extra time to review you paperwork and avoid errors that might have slipped through.
It's common to receive W-2 forms from your employer by the end of January, according to Investopedia. If you have investments, you will receive your 1099s which detail any stock or bond transactions from the previous year, around the same time.
Here are a few additional tips for you to consider when filing your taxes:
Keep your records in check
If you've made purchases for work that weren't reimbursed by your employer, you may be able to deduct those costs on your tax return. This is especially true for self-employed workers who can possibly deduct meals, mileage, supplies and other items.
It's also important to keep track of any charitable donations. The IRS offers tax deductions for donated goods, but requires detailed receipts of such transactions. For those who have donated, Investopedia recommends collecting charitable receipts as soon as possible to avoid any problems with the April 15 tax deadline. Depending on the charity, it could take an extended period of time for the organization to provide you with those receipts.
Know the Social Security information for children
If you've adopted a child in the last year, you may be eligible for a tax deduction. Adopters who earn less than $75,000 per year as a single taxpayer or $110,000 as married joint taxpayers are eligible for a $1,000 tax credit for every dependent child supported under the age of 17. But if you don't provide the social security numbers of your children, you won't receive the credit.
*Consult your professional tax advisor for details
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