So what is the secret to how to make your tax filing easier? That secret starts with organization of your financial records. The second secret is to submit accurate data from those financial records on your Tax returns. The third secret is to check and triple check your math. The final secret is to ensure that you and all parties who are filing a joint return sign and date the tax forms. Also ensure that if you are claiming dependents on your tax returns that their names are spelled correctly and their date of birth and social security numbers are accurate.
Once you have your tax forms filled out correctly and are ready to submit your tax returns to the state and federal IRS, take advantage of the E-filing and fill out your direct deposit slips. If you are expecting a tax refund you can have that refund deposited into your local bank account, or better still your ROTH IRA retirement account. Roth IRA is after tax money that will grow tax free, so long as you hold the Roth for at least 5 years.
Let us examine what documents that you need to gather to file your taxes. You need to keep all reportable income from such activities of this kind, earned income your (W-2Forms), Self employed income such as 1099 forms, dividend/interest income 1099 forms, royalty income, income that is derived from disbursement's from your retirement accounts.
For the self-employed tax filer, the IRS considers the following reportable income; Gross receipts from sales, returns and allowances, finance reserve income, interest received from accounts payable finance charges, Income from form 1099-PATR that is related to prior business purchases.scrap sales, bad debt recovered.
The reportable income for self-employed must be supported by sales slips, receipts, deposit slips, canceled checks, invoices, financial statements, business check books
Other documents you want to maintain and keep copies of include your property taxes that you have paid. Any mortgage payments on your mortgage that is tied your your principle residence. You can deduct the interest that is paid towards the mortgage amount owed. If you have a home equity line or loan that is over $100,00 you might not be able to deduct the interest on that balance.
If you have made home improvements on your principle residence during 2009, you could be eligible for the following tax credit of $1,500. replacing old windows with energy efficient windows, exterior doors, solar water heaters, furnaces, air conditioning units.
To help spur the auto industry for 2009 and new vehicle purchased after 2/16/2009 until 2010, will have all state and local sales taxes and excise taxes will be a deductible. This is for a qualified purchase of a new motor vehicle. If you purchase a plug-in vehicle after 2009, you can also receive a credit up to $7,500 per vehicle purchased. You can also purchase plug in conversion kits for your current vehicle and receive a credit of up to $4,000.
Also for 2009 if you are a First time home buyer, you can be eligible to receive $8,000 credit for a married filing jointly tax payer who purchase a primary residential home in 2009. The tax credit for a single tax payer who is purchasing a new home is $4,000. To avoid having to pay the IRS back that tax credit, the home buyers must remain in their principle residential home for at least 36 months from the date of the purchase and sale.
The key to reduce your stress at tax time is to start taking the time now to organize your records.