Countdown to Tax DayWhen it comes to filing our tax returns, most of us either panic or put it off. But the process can be less overwhelming when you have a plan. Here are 10 steps to help you to turn that mountain of paperwork into an organized stack.
10. Get your W-2
Employers are required to mail out W-2 forms by January 31. That means the form should be in your mailbox no later than the first week of February. If you didn’t receive the form by Valentine’s Day, ask your employer for a new copy.
9. Gather other income forms
A W-2 is not the only income-related form you’ll need. If you completed contract work that earned over $600 last year, you’ll receive a 1099 form. Rental property income and unemployment income need to be reported, too. Make sure you gather forms from your bank for any type of savings or investment income. Financial institutions are required to send your forms by February 15.
8. Collect those receipts
Gather any receipts you might be able to deduct. These can include receipts for medical expenses not covered by your insurance, as well as any property taxes and job-related expenses. If you can’t find the receipt, you might be able to track the payment on your bank account.
7. Find your donation records
Depending on how much money you donated, you might need a written acknowledgement from the organization you donated to. For example, donations of $250 or more require a written record stating the amount of your charitable contribution.
6. Show proof of health insurance
This is the last year you’ll need to show proof of health insurance to prevent being fined. Starting with the 2019 tax year, the law will no longer require it.
5. Have all your personal information in hand
You’ll need to have your details as well as the details of all your dependents. That includes social security numbers, addresses and the dates of significant events, such as moves.
4. Get a copy of last year’s return
This will make it much easier to fill out details that have remained the same. It will also help you remember if you have filed for certain exemptions or deductions that may or may not apply anymore.
3. Decide if you’re e-filing
If you’re expecting a tax refund, you may receive it faster by filing online. The IRS reports that it typically takes three weeks or less to issue refunds for tax returns filed electronically, as opposed to six to eight weeks if you file a paper return.¹ If your adjusted gross income is $66,000 or less, you can use the IRS Free File service. If your income is $66,001 or higher, there are a number of commercial software options available online.
2. If all else fails, file an extension
If you’re overwhelmed, file for an extension. You can do that any time before April 15th. It will allow you to postpone filing your 2018 tax return until October 15, 2019, while avoiding any late fees.
1. Tax Day: April 15th
Unless you’ve filed for an extension, your tax return is due on April 15. Be sure to save a copy for your records. If you’re filing through the mail, get a stamped receipt with the day’s date on it as well as a tracking number to provide proof of delivery. Now kick back and relax, because you’ve earned it.