Don’t Write Off Tax Season, Get Prepared Now
While tax season is still months in the future, now is the time to start gathering documents and being aware of what you will need to file. Whether you have been filing taxes for 50 years or this is your first go at it alone, it is always good to brush up on what you will need to make sure you are not scrambling at the last minute. Read on for tips to help prepare you for tax season.
January is typically when you will start receiving the documentation you will need to compile your tax information. Here is a very basic list of the forms you want to be on the lookout for:
- Form W-2 for wages/salary, federal and state tax withholding, tips and earned income credit (Your employer should send this to you by January 31, 2020)
- Form 1099-G if you are unemployed and receiving unemployment benefits
- Form 1099-Misc for compensation from freelance work
- Form 1099-R for annuity income, IRA and pension
- Form 1099-Div for those who have earned dividends
- Form 1099-B, 1099-S for income from sales of property and stock
- Form W-2G for any income from gambling
- Any other income from prizes and awards (such as lottery winnings), jury duty pay, alimony, or rentals
Along with those forms you will want to make sure you have your personal information in order as well. Make sure you have your social security card or tax ID card and your unexpired driver’s license, ID card or passport. Trust me, it is not fun to realize your driver’s license is expired as you are sitting across from your tax preparer! If your filing includes dependents, make sure you have their information handy as well.
Read About New Laws
Tax code and deductions can change and those changes can have an impact on how you should best file your return. Take advantage of resources to ensure you are maximizing deductions and have the correct amount of tax being withheld from your paycheck. A great place to check the new withholding tables is the IRS’ tax withholding estimator here.
Decide How You Will Prepare and File
Depending on the simplicity, or complexity, of your situation, how you prepare and file your taxes can have a big impact on your final result. If you had major life changes in the previous year it may be worth investing in a professional tax preparer. Working with a tax professional affords you the ability to make sure everything is done in a timely and proficient manner. If you are working with a professional, remember to schedule your appointment as soon as you are able as appointment will fill quickly closer to the April deadline.
If you cannot afford to hire a tax professional, there are multiple resources available for free. Free File Alliance partners with leading tax software companies and the IRS to provide no cost tax preparation assistance to those with incomes less than $66,000 per year. There are multiple other resources available based on your income and situation that you can find through the IRS online location tool here.
Check Your Beneficiaries
While your beneficiary designations do not have an effect on your tax filings, now is a great time to make sure your designations are correct as your designations can impact the filings of your heirs in the future. If something unexpected were to happen to you, having your beneficiary information up to date and properly coordinated can have a profound effect on the tax bills of those receiving your assets. Working with a financial planner can find options for you and your beneficiaries to ensure that your hard earned assets are taken care of well into the future.
Call Cambria Mortgage
To get started, call Cambria Mortgage at 952-942-0110 or visit CambriaMortgage.com. Our team of experts will provide personal, hometown service with sound advice and impeccable attention to detail at every step of the process.