No one really looks forward to tax season. Filing your taxes can be a time-consuming and somewhat tedious undertaking.
Be careful as you prepare to file your returns. If you keep a few simple ideas in mind, you could easily reduce your risk of tax problems.
1. Make sure your filing documents are correct
Your employer and other financial managers will send you different tax documents yearly. They usually have to send you these forms during late January or early February. These may include:
- Form W-2: These forms verify wages, tax withholdings, social security and Medicare taxes, and other information.
- Form 1099: 1099 forms verify financial returns that aren’t related to your salary. Your 401(k) and other financial management plans may send 1099 forms.
- Form 1095: This is a form that verifies that you have health insurance. The Affordable Care Act requires most Americans to have coverage. These forms verify that you have insurance and help protect you from penalties.
2. Take note of special filing instructions
Tax reference documents have a lot of variations and no two are alike. When you file your tax return, make sure you take note of special variations in your filing documents.
Additionally, file a return that corresponds to your finances. Some people may need special 1040 forms based on their income means.
3. Remember any deductions
Many different people qualify for tax deductions based on their financial dealings. Investments like new homes, loans, or charitable giving may all qualify you to save on taxes. If you qualify for a deduction, keep appropriate documentation that verifies these investments.
4. Establish a good tax history
Many people use the same tax filing methods from year to year. Some have their taxes compiled by a tax professional. Others use self-filing services like TurboTax®. Whatever methods you use, it is a good idea to consistently use that method.
More importantly, after you’ve filed your taxes, keep a copy of your return and all documentation on file. Most people keep these forms for at least 10 years. Good records will help you address any problems in case of questions about your returns.
Whatever you do, make sure you file your taxes honestly and as accurately as possible. Any law abiding citizen wants to file his or her taxes correctly. A failure to do so could result in audits or penalties for the taxpayer. Dishonestly filing taxes could even result in jail time.
After you’ve filed your taxes, check in with your Perkasie insurance company. The Weimer Group can review your current policies with you to help you make the most of financial savings. Give us a call at (215) 257-9171 for more information.