There are a few obligations in life that you can never skip out on. Filing your taxes is one of those “never skip out on” things. There is some truth to the only guarantee in life is death and taxes. If you are one of the millions of Americans that have decided to take the bull by the horns and file your own taxes at home, there are a few things you need to know before you get started.
Ignorance of the Law Is Not a Valid Excuse
The IRS is often portrayed as a three-headed monster that has it in for everyone. The IRS is not that bad. They will often work with you to pay back taxes and more. Of course, if you break the law and make a misstep, they are not that understanding. Even when your excuse is “I did not know that was a law”, you are still responsible for the fines and penalties. Not knowing the law does not protect you from penalties for breaking the law.
In other words, it is your business to learn all you can about filing taxes and the tax laws that may apply to your situation. Most tax lawyers dedicate a lot of time to tax problems that result from not being familiar with the tax law. In 2005, the ABA found that most lawyers (28%) are between the ages of 45-54. By this time in their life, most tax lawyers can easily rattle off all the cases that they handled because of a violation of the tax law where the individual claimed ignorance.
Protect yourself and brush up on the tax laws that affect you and your life. If you cannot make time in your life to do that, see a tax professional that can manage your taxes. The repercussions of breaking tax laws can negatively impact your life.
Have All Your Documents Ready to Go
Make sure that you have hard copies of your mortgage statement, W-2s (or 1099s if they apply to your situation), social security numbers for everyone you are claiming, investment returns, and other pertinent information. You will need these documents and the information they contain to file your taxes and need to keep them on hand in case the IRS has questions.
Input the information exactly as it appears on your W2s. If there is information that needs to be corrected, be sure that you wait to file until you have the corrected form. One of the major reasons tax returns are rejected by the IRS is because there is a minor error like the spelling of a name or an incorrect number. It only takes a small mistake to get your tax form rejected.
Decide How You Will Get Your Refund
A recent survey found that about 66% of those Americans that got a tax refund decided to have their refund direct deposited, which means that roughly one-third of those that receive refunds pick another way to get their money. It is important to figure out where you want your refund to go because there is a section on the tax form where you will indicate how you want to get your refund. Remember that an electronic deposit is the quickest way to get your money.
Read Up On Deductions And Credits
Did you know that child support can be deductible? A parent that pays 50% or more for a dependent child can claim that as a deduction. There are other deductions that you may also be eligible for that you will not want to miss out on. Taking advantage of all the possible deductions starts with understanding what deductions are available to you.
You Should File Even If You Can’t Pay Right Now
Life gets hectic and something like a tax deadline can sometimes get lost in the mix. However, missing a filing deadline is not an option. File your taxes even if you cannot pay your taxes right now. People make the mistake of thinking that filing an extension frees them from interest and penalties; it does not.
If filing your own taxes seems daunting, a tax professional can make life easier. Consider all your options before your next tax filing comes around. Then, you’ll be ready to get started.