Love it or hate it, the 2017 tax season is upon us. Whether anticipating a sizable return or dreading how much you might pay (or hoping to just break even), a little organization beforehand could be the difference between writing a bigger check and keeping a few extra dollars in your pocket.
Filing season officially opened on January 23. The Internal Revenue Service announced earlier this year it expects more than 153 million tax returns to be filed. Since the traditional April 15 deadline falls on a Saturday this year filers have until April 18. Even with the extra days, now is the time to organize your documents to ensure things go as smoothly as possible.
According to Laura Hendrix, an assistant professor of family and consumer economics for the University of Arkansas System Division of Agriculture, you’ll need to have more than just a W2.
“W2s, 1099s, social security numbers, interest and other income statements and bank account numbers for direct deposit of your refund, are the basics for 1040 EZ and 1040A filers,” Hendrix said. “For those with dependents and/or itemized deductions, you’ll need supporting documents for those items to complete form 1040 and other related forms such as Schedule A for itemized deductions.”
Additionally, contributions to a Traditional Individual Retirement Account are deductible for those who qualify. These contributions can be made up to the April 18 deadline. Itemizing or not, the IRS has a complete list of documents needed at their website. It’s worth taking a look before making an appointment with a tax professional or setting off to conquer your own forms to guarantee you have what you need to get deductions you are eligible for.
“Filers may not be claiming all the deductions and credits for which they qualify,” Hendrix said. “Even moderate income filers qualify for the Earned Income Tax Credit and child tax credits.”
The IRS has already told filers claiming the EITC or additional child tax credit to expect refunds to be delayed until February 15. While delays are anticipated every year, the method of filing you choose may impact how fast your return is processed.
“For the earliest possible refund, file electronically ASAP,” Hendrix said. “Use Form 8888 to have your refund deposited directly into your account. Filers can designate up to three savings and/or checking accounts. This is a great opportunity to save.”
Once all tax documents are organized or ready, many ask the debatable question – hire a tax expert or do it yourself?
“The more complicated your return, the more it pays to have a professional prepare your taxes,” Hendrix advises.
“However, for simple returns, consumers are much better off preparing their own. Anyone who only needs 1040 A or 1040 EZ can prepare their own return. IRS makes it easy with Free File. Filers with an adjusted gross income less than $64,000 qualify for free tax assistance. I would caution consumers about using advance refund loans. Filing electronically and using direct deposit of your refund is typically a quick turnaround. Regardless of the service you use, make sure it is reputable.”
Filers meeting the qualifications for free tax assistance can visit here for more information.
Along with gathering documents and filing in a timely manner, Hendrix’s last bit of advice warns consumers of any tax scams that may be circulating.
“It seems like there are more tax scams every year. Consumers need to be extremely cautious of solicitations via phone, text or email for tax information or any other personal or financial information,” she said. “Scammers may claim to be with the IRS.”
For more information about taxes, visit your tax preparer or IRS.gov.