It’s that time of year again! Tax season officially begins Jan. 23, and although you still have more than enough time before the April 18 deadline, it’s never too early to start getting ready for tax season. To help, we have tips for a few things you can do now, including gathering your documents, determining your filing status, deciding how you’re going to file and knowing this year’s deadlines.
Start organizing your documents
As you likely know, there are a number of documents you need to have on hand before you can complete the filing process. So why not get a head start and begin gathering those documents now to speed up the process later? First, you’ll want to find your tax return from last year, as you may need to reference it to verify your identity. Next, you’ll want to gather any W-2s or 1099s from 2016 — note that your employer must submit their W-2s to the IRS by Jan. 31, which means you should receive it before or around that date — and other relevant paperwork, like receipts, invoices, medical bills or anything you need write-off purposes. On top of that, you’ll want to make sure you have a copy of your 1095-A if you purchased health insurance through a state or federal exchange, the corresponding 1098 forms if you paid interest on a mortgage or student loan, as well as any 1099 forms you need for miscellaneous incomes, stock or brokerage accounts, investment or pension accounts, unemployment or any other 1099-related event. Finally, if you had any major life events in 2016, you’ll want to make sure you have copies of that paperwork before filing your tax return, which brings us to our next point.
Consider your filing status
Did you get married, have a baby or experience a divorce in 2016? If so, it likely qualifies as a major life event, and thus, will impact your filing status. If you got married, for example, you’ll now need to consider whether your filing status will be “married filing jointly” or “married filing separately.” Even those who didn’t experience a major life event in the last year will likely want to consider how they’re going to file their taxes this year, as there is a chance you experienced some life changes last year, whether you moved, earned a major raise at work or went back to school. The IRS details all the filing options and even has an interactive tool to help you determine what your filing status should be.
Decide how you’re going to file
Once you have all the forms and you determine the best filing status, you’ll want to decide how you’re going to file your taxes: online or in-person. While you may be skeptical about the safety of filing your taxes online, you may be pleased to learn more and more Americans are choosing e-filing over traditional filing. In fact, the 2015 tax season saw an increase of more than 2 million e-filers compared to the 2014 tax season, according to IRS reports. Not only is e-filing easier because you can do it from the comfort of your own home and cost-efficient, but it’s also just as secure as traditional filing — you could potentially argue that’s it’s safer than handing all of your personal information over to someone who may not store the information in a secure manner. That being said, it’s still wise to be cautious about who your trust with your personal information, and take precautions whether you file in-person or online, as tax fraud can impact anyone. Follow these tips to avoid falling victim to tax theft, and if you’d prefer to e-file, visit our online tax service reviews to find a legitimate service for your e-filing needs.
Know this year’s deadlines
Although it’s always a good idea to file your taxes sooner rather than later, sometimes life gets in the way and you just don’t get around to filing until right before the deadline — or you may even miss this deadline and opt to file an extension. That’s why it’s extremely important you know when Tax Day is each year. The 2017 deadline for filing 2016 federal returns is April 18, 2017. And if you file an extension for your 2016 taxes, which must be filed with the IRS on or before April 18, you’ll have until Oct. 16, 2017 to complete your return. It’s important to note that while the deadline for filing your federal tax return is the same for everyone, state deadlines may vary, which is why you’ll want to make sure you check your state’s Franchise Tax Board website for more details. If you need any other information about filing your taxes, check out the IRS’ website, which also notes other important dates, such as when you can expect to receive your tax refund (if you’re receiving one this year).
To get started on your 2016 tax return, visit our online tax preparation and filing reviews to find the best service for you.