Well, it’s official; there’s less than two weeks until taxes are due here in America.Â Yes, in 2011, you need to have your taxes filed by April 18th in order to have your taxes considered on time.Â Hopefully, you were reminded by my Spring Cleaning post that they were due and already took care of it.Â If not, you need to get a move on; those taxes aren’t going to prepare themselves.
Luckily, it’s really not that hard to prepare taxes, even at the last moment.Â Yes, yes, I know, most people would rather get a root canal, but that’s just paranoia.Â Here are a few hints to help you get things organized and get your taxes done:
1) Make sure you are organized: One of the hardest parts of filling out your taxes is getting all your paperwork together and organized.Â You have bank statements, brokerage statements, and a W-2 form for every job you’ve held in the course of the past year (which, if you’ve jumped from job to job as I did, might be quite a few).Â With luck, you’ve been making a point of keeping all these important documents in a safe and secure place (or places, so long as you know where everything is).Â You have been, right?
Alright, I understand that sometimes you don’t keep track of everything you get in the mail, even if it is vital for filling out your taxes.Â Luckily, most of your bank and brokerage statements should available online; if you have misplaced the copy that you received in the mail (or if you did not receive a copy in the mail; more and more financial institutions are switching to a policy of not mailing out such paperwork unless specifically requested), you should be able to print out another copy as easily as going to the appropriate website and finding where the forms are located.Â W-2 forms and other information from your job(s) might be harder; if you have lost your W-2 form, you’ll need to get another, or may need to fill out Form 4852 for the IRS.
2) Fill Out Your Taxes: Alright, now that you’ve gotten all your paperwork organized and sorted through, you need to fill out your actual taxes.Â There are several approaches you can take, depending on the complexity of your financial situation and your confidence on filling them out.Â Some of your options include:
- Fill Out Paper Forms On Your Own: If your tax situation is fairly simple, you might consider getting a paper copy of form 1040A or 1040EZ (whichever is more appropriate for your situation) and filling it out manually.Â If you are a high school or college student (or have one or more such person in your life), you should definitely consider this option, as you can get experience with filing your taxes while your financial situation is still (hopefully) simple enough as to not require too much help.Â Similarly, if you are an adult with one job and not investment, side business, or rental income, you can probably use a paper form without too much trouble, as long as you are careful and double (triple) check what you fill in on your form.
- Use Tax Preparation Software: A common option for many people nowadays is to use tax preparation software for federal (and usually, state) taxes.Â I’m a fan of H&R Block At Home, myself, having used it the past two years for both my federal and Pennsylvania state taxes.Â Â But there are plenty of programs available, including some free ones (TurboTax’s free Federal program comes highly recommended).Â This method should suffice for most situations, although if your tax situation is particularly complex, or you just want someone else to look over your work, you might need to…
- Use a Tax Preparation Professional: Let’s be honest, taxes can be complex, and having someone who knows what they are doing help you along the process can be a great help.Â Just be aware that in many states, the people you speak with at tax prep storefronts may not have too many qualifications, other than perhaps a short course on how to prepare taxes.Â If your situation is particularly complex, you might want to find an accountant to help you, both with your taxes and your financial situation in general.
No matter how you fill out your taxes, you’ll eventually find out whether you’re getting a refund or owe more money to the government.Â If you are getting a refund, there’s no reason to wait; file that form and consider what you’re going to do with your refund.Â If you owe money, you’ll still need to file, but first…
3) Make Sure You Have Money Available to Meet Your Tax Bill: If you file online, you’ll have the opportunity to connect to a bank account to have the money transferred to or from.Â You’ll need to ensure that there is enough money available to cover you bill.Â By making sure you have at least a few weeks available between when you fill out your tax form and when the taxes are due, you’ll have a chance to transfer money between accounts to cover the shortfall, deposit more money to ensure you have enough available, or maybe even devote a pay check to covering your tax bill.Â (Hopefully, it won’t come to that last one.)Â Take heart, though, in the fact that by not getting a refund, you didn’t provide the US government with what amounts to an interest free loan for the last year.
If you follow these three simple tips, you should make it through tax season without too much trouble, and be nice and relaxed in two weeks when everyone else starts to panic.Â Cheers!