Tuesday, January 29, 2013

Tax Tip Tuesday, #3

In an effort to help make tax season a little less stressful for you, we wanted to share these tips from Turbo Tax with you. You can read previous tips here.

3. Organize your records
Good organization may not cut your taxes. But there are other rewards, and some of them are financial. For many, the biggest hassle at tax time is getting all of the documentation together. This includes last year’s tax return, this year’s W-2s and 1099s, receipts and so on.

If you really want to make tax season go smoothly, use a personal finance software program like Quicken throughout the year so you have easy access to all the information you need.

How do you get started?
  • Print out a tax checklist to help you gather all the tax documents you’ll need to complete your tax return.
  • Keep all the information that comes in the mail in January, such as W-2s, 1099s and mortgage interest statements. Be careful not to throw out any tax-related documents, even if they don’t look very important.
  • Collect receipts and information that you have piled up during the year.
  • Group similar documents together, putting them in different file folders if there are enough papers.
  • Make sure you know the price you paid for any stocks or funds you have sold. If you don’t, call your broker before you start to prepare your tax return. Know the details on income from rental properties. Don’t assume that your tax-free municipal bonds are completely free of taxes. Having this type of information at your fingertips will save you another trip through your files.

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