Your tax return isn’t due until April 18th of next year, but if you’re due to receive a tax refund, it pays to get your tax return filed as quickly as possible. As the year comes to an end, it’s time to start preparing! Getting your documents in order today will help you file your tax return as quickly as possible next year.
If you want to get a jump on your taxes now, here are a few things you can do to get ready.
Charitable Donation Receipts
For all the charitable donations you make this year, be sure to collect and organize the receipts. To claim donations of $250 or more, whether it’s cash or property, you’ll need written documentation showing the amount of cash and description of the property donated. You won’t be able to deduct your time, so don’t try to get a receipt for pro-bono work you’ve done, but you can deduct the miles traveled if you volunteer. Finally, if the donation is over $5,000, you’ll need a written appraisal in addition to the receipt itself. TurboTax ItsDeductible can help you easily and accurately value and track your donations.
Gather Your W-2s, 1099s, and Other Important Documents
Your W-2s and 1099s will be here before you know it. Employers and financial institutions will be required to send them out by January 31st so you will start seeing them in January. Once you start receiving your tax forms put them all in one place so you don’t forget anything when you sit down and file. Some employers and payroll services offer you the ability to go online and access your W-2 before you receive it in the mail. TurboTax can also automatically import your W-2 tax form data from over a million participating employers and financial institutions.
Don’t forget that TurboTax lets you snap a photo of your W-2 and the information securely transfers to the correct tax forms so you can jump start your taxes.
Also, make sure you have a copy of your previous year’s tax return before you sit down and file. You will need to input your previous year’s adjusted gross income before you e-file. You should always keep a copy of your previous year tax return for your records. Having a copy available can serve as an additional reminder of previous year’s income and tax deductible expenses plus you may need it for bank or home loans.
Get Tax Credits You Deserve
There are federal tax credits that you may be eligible for like the Nonbusiness Energy Property Credit if you replace your windows, doors, certain roofs, and add insulation. The Nonbusiness Energy Property Credit is about to expire on December 31, 2016 unless it is extended by Congress. If you are considering replacing windows, doors, or insulation you may want to do it soon so you can take advantage of the energy efficient credit while it’s available. If you do upgrade, be sure to keep a copy of the receipt, to prove how much you paid, as well as the specifications of your improvements to prove you bought qualified products.
Make Last-Minute Tax Moves
Finally, use this time to prepare any last minute tax moves you might want to consider like selling investments, prepaying property taxes or your mortgage, and other tax reducing activities. It’s best to think about these things early in December. Depending on your federal tax bracket, the tax savings can be quite substantial.
Don’t worry about knowing these tax laws. TurboTax will ask you simple questions about you and give you the tax deductions and credits you deserve based on your answers.