It is that time of year again – time to gather your documents and think about taxes. April 15 will be here before you know it, and if you wait until the last minute, you could be in big trouble. The availability and quality of tax software makes filing your own return simpler than ever, but it is still far from easy. If you want to do your own taxes without losing your mind, you need to take the right steps long before the April 15 deadline rolls around. Here are 12 things you can do to get ready for tax time and file your return without delay.
Read: This Is How You Can Maximize Your Tax Return
12 Simple Steps to Make Tax Time Less Taxing
1. Decide which tax prep software you will be using. Do you prefer the online version, which is portable, or the software, which is tied to your computer?
2. Create an account for your chosen tax software package. If you used the same software package last year, log on to make sure you still remember your credentials.
3. Gather the information you will need to file your taxes online, including the PIN code you used last year. You may also need a copy of your tax return from last year.
4. Make a list of your sources of income, including not only your employer but bank accounts, brokerage accounts, stock sales and so on. Record these income sources in a spreadsheet or document.
5. Estimate your income if you can. If you have your final pay stub for the year, you can use it as a stand-in until you get your official W2. You can do the same by looking at your December bank and brokerage statements.
6. Log on to each of your accounts to see when your tax documents will be ready. Most brokerage firms publish a tax documents calendar, and many banks do the same.
7. Create a reminder for each tax document, then log back on to your account to gather the information. Create a folder on your cloud drive or computer and save each new tax document to that folder.
8. Keep paper copies of tax forms you receive in the mail. Dedicate a folder to each tax year and retain those documents for at least three years. You may also want to scan those paper documents and retain them electronically.
9. Enter each tax document as you receive it, then cross it off the list you created earlier. Make sure you have all of your tax documents before you file your return. The IRS receives the same information you do, so a mismatch in the reported amounts could trigger an inquiry or even an audit.
10. File your taxes electronically, following the instructions in your chosen software package. Make sure you save a copy of your completed tax return and retain it on your computer or cloud storage service. Be sure to password protect or encrypt the folder that contains your tax information.
11. Watch for emails that indicate your electronic return has been filed and accepted. Follow up with your tax prep company if you do not receive those emails.
12. Put all your tax documents away in a safe place. Retain key information like PIN codes and backup documents. Print a copy of your documents to store in paper form, and keep another electronic copy as well.
Tax time will always be painful, especially if you end up owing more money. Even if you are getting a big refund, the filing process can be tedious and often confusing. While nothing can blunt the pain of filing taxes, the right preparation can make a big difference. The 12 steps listed above can help you get ready for tax time, file your taxes and get your refund without delay.