Updated for tax year 2017.
The way people sometimes talk about tax return preparation, you’d think to file your tax return is the root canal of personal finance. If this is your first-time filing, you may be dreading the experience.
You may be in for a surprise, however.
Preparing a tax return doesn’t have to be difficult. In fact, as a first-time filer, you’ll likely file your return with far less trouble than you think.
Follow these tips to make your first income tax filing experience a positive one.
1. Gather your information first
If you don’t already have a file or box for tax information, start one. It’s important to have it handy before the tax-related documents show up in your mailbox so you can toss them in as they arrive.
If you don’t have a small business or other tax concerns, you may not need anything to prepare your return other than your Forms W-2 and any potential Forms 1099.
It’s much easier and faster to prepare your return if you have all your information in one place before you start.
2. Get organized
Sort your tax documents by type. For example, group your W-2 forms together, and group your interest and dividend income statements together.
Work from a checklist of tax information so you can check items off as you go through the filing steps. For future reference, jot down notes so you can easily remember how the information on your return was calculated.
3. Start early
You’ll have far less stress preparing your return if you give yourself plenty of time to do it.
For instance, if a particular tax form doesn’t arrive or you end up needing more details, you have time to track down that information. Starting early also gives you more time to review your return and make sure you’re not leaving out important data.
Plus, if you have a tax refund coming, you might as well get it sooner rather than later.
Keep in mind, all employers have until Jan. 31 to mail Form W-2 to each of their employees. You may not start receivingtax-related documents in the mail until the first week or two of February.
4. Mark your calendar for April 17
The tax filing deadline for 2017 returns is April 17, 2018. Make sure to file your return by that date to avoid late filing penalties and interest fees on any taxes owed.
If you can’t file your full federal return by April 17, you can file an extension using Form 4868, Application for Automatic Extension of Time to File U.S. Individual Tax Return. That form grants you an additional six months to complete your return. If you choose to file an extension, your next – and final – deadline is Oct. 15, 2018.
You can prepare, print and e-file Form 4868 through TaxAct.
5. Rely on experts
Even if this is your first time, you don’t have to be an expert to prepare your tax return with confidence.
By using TaxAct, you can take advantage of the expertise embedded into their software.
The step-by-step interview is designed to help make sure you meet your obligations to the IRS and get all the tax benefits for which you qualify. Simply answer the questions with your information, and the software will perform all the tax calculations for you.
TaxAct products also include a variety of tools to make sure your return is accurate and you maximized your refund.
6. Read your return
With TaxAct doing the heavy lifting, it’s tempting to just sign the dotted line and e-file it. That’s a mistake, however.
It’s important to understand how your tax return can help you plan to meet your financial goals during the next tax year.
You should know which deductions and credits helped lower your tax bill and how tax items such as stock sales come into play.
In addition, there’s no substitute for reading your return to ensure all of your personal information is correct. For example, make sure you added the right number of exemptions for yourself, your spouse, and any children.
Lastly, double-check thespelling of names, Social Security numbers, and bank routing and account information. Typos are the most common mistake among those who file their own returns.
File Your Simple Tax Return for Free with Taxact
More to explore:
- 5 Tax Filing Tips to Beat the Deadline
- 7 Tax Filing Tips Parents Need to Know
- Tips for Filing Taxes as a Freelance Graphic Designer
