By Angela Epley
Sometimes it can feel like America’s tax system is designed to drive us a little bonkers. We’ve got one of the most complicated tax codes in the world, and even the most innocent blunders can rack up penalty fees from the IRS. That’s why when it comes to what you need to file taxes, it’s always good to focus on the basics.
Remember to actually file your taxes. To be fair, not everyone who fails to file a tax return forgets: for some who had low income for the year, it’s simply not required. But before you start feeling like you’ve scored a win by skirting the paperwork, think again. You could be turning down free money in the form of a refund! In fact, the IRS is sitting on unclaimed tax refunds totaling over $1 billion for around 1 million taxpayers who didn’t file a 2013 tax return. If that sounds like you, get moving. The IRS permits most taxpayers a three-year window to claim a refund.
Prep the proper paperwork. Gather up all your income statements from the previous year and find the right forms so you can report all income and claim every credit or deduction by taking advantage of every available deal. Not sure where to start? Consult this handy checklist. Having trouble gathering your paystubs and statements? Experiment with different organizational systems to streamline the process going forward.
Check (and double-check) your numbers. Even the most number-savvy person can make a super-simple mistake, like writing a 93 instead of 39, which can cause ripples throughout the rest of your tax return. The fix? From missing numbers to math mistakes, proofread your work to ensure everything’s entered and calculated correctly.
Take the time you need. If what you need to file taxes is more time, you’re in luck: just file an extension to buy a few extra months to fully prepare your tax return. Remember, this is an extension of time to file, not an extension of time to pay.
If you’re self-employed, have especially sophisticated investments, recently moved overseas or gathering the right paperwork is taking longer than expected, consider this a smart strategy to avoid incomplete or erroneous tax returns, which might fetch unexpected fees thanks to haste.
If you’re still in doubt about what you need to file taxes, get a little help from your friends – or, at least, a trusted tax professional. Asking for help takes a bit of bravery, and by working with a tax pro, you can learn all kinds of tips and tricks to make future tax filing less stressful and more efficient.
The contents of this document are not intended to be, and are not, legal or tax advice. The applicable tax law is complex, the penalties for non-compliance are severe, and the applicable tax law of your state may differ from federal tax law. Therefore, you should consult your tax and legal advisors regarding your specific situation.
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