Many people look forward to getting a tax return every year from the government. The money from a tax refund is often used to pay for a wide variety of things, including paying down debts, medical needs, or to buying some special things such as electronics or a vacation. Getting that tax refund from Uncle Sam has become an expected income on a yearly basis for many.
This year may mean that some people are going to be surprised when it comes tax time. You may be hoping to buy some item or do something special with that money, but it is possible that it may not come at all this year. Recent tax changes may do away with a tax return for some people. Why not find out now if it will affect you?
By going ahead and getting your tax documents together early, you will know the results of what is going to happen, and whether or not you should count on getting a tax return later. Simply start gathering together all of your papers and documents that are tax related and get them organized so you can start filling out the necessary tax forms – or so that your tax preparer or accountant can do it for you.
Once you know what your tax numbers are, you can begin to see what you will actually be able to get in the way of a tax return. There are a number of changes in the tax laws for 2012 IRS tax reporting this year, and it is apt to affect a lot of people.
Starting Early Enables You to Find All Documents
If you wait until the last minute to get all your tax information together, it is quite possible that you are going to forget or overlook some documents. The exception is if you file them carefully when you get them. The more documents you have, the more tax deductions you may be able to claim.
Collect All Documents Showing Income
There can be a number of documents that you need to find related to income. This includes all documents showing income through salary (W-2′s), self-employment (1099′s), interest and dividends, rent, alimony and child support, distributions, sales, etc.
Find Your Documents Proving Legitimate Deductions
Receipts for all deductions also need to be obtained, which may include: healthcare expenses, education expenses, gifts to a religious organization or charity, child-care expenses, self-employment health insurance costs, business expenses, contributions to an IRA or 401(k) or HSA, etc. Mortgage costs are another possible deduction, and you should have received a Form 1098 from the lender on the interest, says Bankrate.
One tax benefit that many people look forward to each year, especially people who are low income, is the Earned Income Tax Credit (EITC). The IRS provides a special webpage for this credit, called the EITC Assistant, to enable you to determine whether or not you qualify for it.
Choose How You Will Complete Your Tax Forms for a Fast Refund
Once your tax documents are all together, you need to decide how you are going to complete your tax forms. Completing this step enables you to get a refund back sooner than waiting until the tax deadline. You can do it yourself, or have a tax preparer do it for you. The IRS warns that you need to be careful about who you have fill them out for you. They advise you to stay away from preparers who claim to give you more money than others, and those who base their fee on a percentage of the tax refund. Also, you want to be sure to review it before signing it.