Tax Preparation Tips

Tax Preparation is in full swing and for many of us it can be a frustrating experience.  Here are some helpful tips and resources to make it all a bit easier. 1. Stay organized  Put all tax-related statements, information, and receipts into a folder marked taxes as soon as they arrive.  When you are ready to prepare your taxes all the paperwork is right there without having to search all over the house.  This is a great time saver. 2.  Evaluate your deductions  The standard deduction is easy to take, but you may save more money if you itemize.  Take a look at this list of commonly overlooked tax deductions to make sure you aren't missing anything! 3.  Check your tax credits  You may be eligible for a tax credit of up to $1,000 for each dependent child under the age of 17 in your household. Check to see if you’re eligible for other tax credits as well. 4.  Consider taking a loss  If it is near the end of the year, and you are going to have a significant capital gain, think about unloading a less profitable investment and offsetting the gain with a loss. 5.  Stay up-to-date  If you are preparing your taxes yourself make sure you have the latest software. (The cost may even be tax deductible.) 6.  File Online  The Internal Revenue Service offers a FREE electronic filing program for taxpayers filing Form 1040.  The IRS processes electronic returns faster than paper ones, you can expect to get your refund three to six weeks earlier. 7.  Don’t forget about your unreimbursed business expenses  Things like union dues, travel expenses, and research materials may be deductible. Check with the IRS for details. 8.   Contribute to your retirement accounts  You have until April 15, 2014 to contribute to your retirement account for 2013.  That’s the deadline for contributions to a traditional IRA, deductible or not, and to a Roth IRA. However, if you have a Keogh or SEP, and you get a filing extension to October 15, 2014, you can wait until then to put 2013 contributions into those accounts. Start tax-free compounding as quickly as possible, don’t wait to make your contribution. 9. Claim the simplified home office deduction  New for 2013 returns filed in 2014, the IRS is now offering a simplified home office deduction.  The new optional deduction is $5 for each square foot of home office space, up to a maximum of 300 square feet. That comes to a maximum $1,500 annual home office deduction. 10.  Take a little more time   File for an extension now if you feel you won't be ready.   The extension gives you 6 more months to file and avoid the 5% per month late filing penalties.