Putting Together Your Tax Toolbox

toolbox

Just like wrenches are the right tools to loosen things up, tools like correct paper work and tax software can make all the difference in tax preparation.

Tax time is approaching, which is great news for those who are expecting healthy refunds. I usually have to pay, so I slouch towards the filing deadline with a combination of dread and terror. Whether tax time means you have money coming or going, it helps to be organized. Put together a tax toolbox that will make it easy to manage and file your taxes.

Personal Information. You will need the usual details – name, address and social security number. Make sure you also have your bank account information handy. That way, you can have your refund automatically deposited into your checking or savings account. It’s faster than waiting for a check. You can also pay electronically.

Paperwork. Make sure all of your tax paperwork is gathered together in an easy to access location. I usually do my taxes on my own, but a local tax preparation firm gave me some help recently. They sent big envelopes in the mail, with a checklist on the front and plenty of space to hold my paperwork. I immediately used the oversized envelope to hold my 1099s, W-2s, receipts and other documents.

Forms. Whether you are filing online or with traditional paper and black pen, make sure you have the right form to file and the instructions that go with it. Most people use a 1040, but if your taxes are simple, use the 1040EZ. Look for Schedule C if you are a contractor or self-employed. All forms can be found on the IRS website.

Software. My parents swear by TurboTax. There are many products you can buy in stores or online to quickly file your taxes electronically. Use TaxAct for free, or check out the e-filing capabilities of H&R Block, Jackson Hewitt and other tax preparation retailers.

Copies. Make sure you have access to a printer, if you are filing electronically, or a copy machine if you are mailing in your return. You want to keep a copy of everything you send the IRS, including worksheets, forms, receipts and statements. Keep the copies close in case you need to access it during an audit or if you do not receive your refund.

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