Unless you’re a huge numbers nerd, filing your taxes probably isn’t the most exciting thing on your to-do list. Especially with the changes for 2016, which aims at increasing security, you’ll definitely want to get a jump-start. Here are some tips to keep your info safe and prepare for a stress-free tax season:
Get your paperwork in order
“Before you start filling out your form, make sure you have all your necessary tax documents,” recommends Kay Bell, a tax analyst for Bankrate and founder of Don’t Mess With Taxes. This includes your W-2, statements documenting educational costs that might be deductible (i.e., student loan interest, 1098-T with tuition and fees details, job-related continuing education courses), moving expenses if you relocated for work, any job-hunting expenses, and retirement account contributions. “All these areas could provide tax deductions, but you’ll need the documentation before you can fill out your 1040,” explains Bell.
Look into your filing options
If you decide to work with a professional, get a quote beforehand to make sure it falls within your budget. Eric J. Nisall, founder of AccountLancer, Nisall recommends checking to see if the tax professional files your return using their own software and signing it with their own name and Preparer Tax ID number. “That way, they’re taking responsibility for the accuracy of the return.”
If you decide to file using tax preparation software, be as thorough as possible. Creating a checklist will help you stay organized and prevent you from overlooking anything. And if your annual adjusted gross income is $62,000 or less, you’re eligible to use the IRS Free File program, a free tax filing option. If your income is above $62,000, you can still access the electronic versions of tax forms. An added bonus with Free File is that you can also opt to have your IRS tax refund deposited directly into your savings account.
Double-check the numbers
When it comes to inputting numbers it’s far too easy to tack on an extra zero or switch two numbers. “Web-based programs do the calculation based on the numbers you provide, so if you transpose numbers, you can’t blame the website for making a calculation error,” explains Nisall. “You may end up paying interest and penalties if you end up owing more after the error is detected.” Even if you’re handing off your work to a tax professional, taking the time to double-check the work will prevent costly errors in your tax return.
Take security measures
It doesn’t hurt to be super cautious when filing your taxes. While on the Internet make sure you’re working within a secured network. You might want to steer away from using public Wi-Fi at the coffee shop. And as always, come up with a unique, strong password for any tax-related software and accounts.
If you were previously a victim of identity theft or reside in Georgia, the District of Columbia, or Florida, which are the top three states for tax-related identity theft, you can get an IP PIN, which is a 6-digit pin that adds an extra layer of ID theft protection. This pin number changes every year and once you sign up for one, you’ll need to use it to file your taxes every year thereafter.
Filing early during tax season will prevent you from falling victim to identity theft and IRS fraud. “Criminals usually try to file fake returns using stolen Social Security numbers early in filing season,” explains Bell. “By filing your legitimate return as early as you can, you’ll beat the crooks to the punch.” Plus you won’t get dinged a penalty fee, which is normally 5 percent of the additional taxes owed for every month your return is late.
While filing for taxes can be quite an endeavor, preparing ahead of time and getting your paperwork can help you file in a timely matter. On top of that, you won’t run around like a headless chicken in a frenzied state of confusion. All good things.