Tuesday, January 31, 2012

The Frugal Files: It's Tax Time!! Get Ready to File!!

Hey frugalicious ones!! It's tax time!!

By now, your W-2s should be rolling in, as they are to be made available to you by January 31!! So check your mailboxes and if your place of employment is savvy, check your email. It's time to get your taxes done!! The earlier the better, be it you get a refund or you owe. If it's the latter, you'll want the extra time to get your debt paid by the April 15 deadline.

*Note* For those gungho about filing and you did so already...there could be a delay in your refund, if you're expecting one of course. USA Today reported the IRS has installed new safeguards in their systems to prevent fraud, so taxes filed before January 26, will have to wait another week for refunds. Check here: Tax Refund Delays Sorry...

This week's blog isn't about how to file your taxes, because I'm no accountant, but I can share how to get ready to take care of your tax filing business. First, if you have a simple tax return, meaning 1-2 W-2s, then filing yourself should be an easy task. Here's a freebie I posted on my Facebook page for free advice from the friendly people at Turbo Tax. If you have a simple return, you can get started for free!!

As for getting yourself prepared for your preparer, let's get started. If you're expecting a complicated filing experience, then it's best to be ready so that it goes smoothly. You’ll need a file folder, paper clips and post it notes. Separate all your "stuff" into like item piles and label them. Everyone in your household should have their own pile.

- All W-2s from each job worked in the previous year
- Check stubs from any other income received (self-employment, contract positions, jury duty)
- If no check stubs, then write down any additional income you received

Interest Statements
- All 1099-INT forms received, that reflects all interest made the previous year
*Note: if your interest was less than $10, most financial institutions won't bother giving you a form. Write it down if you like, but you probably won’t need it.
- Those with mortgages, put your Annual Tax and Interest Statement in this pile

Misc Forms
- If you have college students, don't forget to grab the 1098-T form. You should have received it in the mail.
If your child isn't that old yet, here's a link for other tax benefits, just for being a parent: 10 Tax Benefits for Parents 
- Large, out of pocket medical bills? You got it, create a pile for that too.

- Whether it's a 1099-R, 1099-DIV or other investment tax form, put it here. The IRS needs a record of what you invested and what you made on those investments.
- This paperwork includes your statements for 401ks, IRAs, mutual funds, etc.
Ask about a credit known as The Retirement Savings Contributions Credit or Saver's Credit. You may qualify.

Charitable Contributions
This is my FAVORITE pile and the biggest. All year you've been (I hope) donating to non-profits such as church, goodwill, and other tax-deductible 501c3 organizations. Now is the time to make them count. You should have been keeping track in your checkbook, marking the donation as TD (Tax Deductible) and if the organization is professional, they would have sent/given you a thank you note/tax deduction letter.

On a separate sheet of paper, list both cash and in-kind donations; donations done in goods and services. So your clothes and electronic donations, as well as your volunteer time count in your favor. So your pile should include:
- Receipts from all donations
Don't have a receipt, but wrote a check? Print/provide your returned check copy.
- Receipts from items you purchased for 501c3 organizations
Did you ship a donation or purchase food for a community service function? Receipts for that postage and grocery store run go here.
- Records of mileage used for non-profit organizations
Do you volunteer regularly? Track your mileage to and from there and add to this group.

Now that you're equipped with your paperwork, you're ready to file. The IRS is always helpful to the taxpayer, so check out their site to start. It's free!! IRS Free File

My tip for next year's filing: When filling out your deductions or withholdings for your check, read it carefully. A savvy, frugalicious belle will be sure to get her money when she earns it, instead of letting Uncle Sam borrow it all year long, not pay her interest and then give her back her own money later. Purpose to break even next year and get more money throughout the year, but if you MUST have a refund the good news is you can track it. Are you asking Where's My Refund? Ask the IRS.

Frugalicious Diva

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