Simple Hacks to Minimize the Time You Spend Filing Taxes
The Internal Revenue Service is officially ready to accept your 2015 tax return! Though few of us look forward to preparing and filing taxes (unless there’s a big refund involved), but there are some ways you can minimize the estimated eight hours most of individual taxpayers spend on their annual tax filing.
Use these simple tax filing hacks—none of which eliminate necessary steps from the tax preparation process-before you sit down to file your taxes.
Create a checklist of all the tax forms you expect to receive. Though the IRS began accepting 2015 tax returns January 19th, your tax filing will likely be easier if you wait a few more weeks—at least until you receive tax-related paperwork from employers, financial institutions, and similar organizations as you expect.
- Make a list of all the tax-related forms you expect to receive. This may include a Form W-2 from an employer, a 1099-MISC if you were paid for contract work, and a Form 1098 if you had a mortgage in 2015.
- If you earned interest from a financial institution, you may receive a 1099-INT. If you won money gambling, you may receive a W-2G from the gaming organization that paid you (depending on how much you won, and how).
Keep a checklist of the tax paperwork you receive. When tax forms arrive in the mail, open the envelopes to make sure the forms are what you think they are, and store them together in one big folder. Create a “2015 tax documents” folder for your email. When you receive messages that tax forms are available for download, move the message into the folder so you can find it again easily, but print the form itself. Put it in the folder where you keep the rest of your tax forms.
If you don’t get a tax form as expected by the end of February or the numbers reported on forms you do receive seem inaccurate, contact the organization in question and let them know.
Dust off your previous year’s tax return. Review your previous year’s tax return to refresh your memory on credits, deductions, and expenses you took. For those you’ll take again, collect the receipts, documentation and paperwork to substantiate each. Keep your hard copies together in one folder, so you have them on when you sit down to prepare your taxes. Print your 2015 credit card statements, and your 2015 bank account statements so you can easily transaction amounts and dates when you file.
Check out the IRS tax interview sheet. List all your important life events for 2015. Purchases and sales of property, births, deaths, marriages, divorce, moves, job changes and custody arrangements can all impact your taxes. You may need to gather documents to substantiate the event when you claim it on your taxes.
If any life event triggered an additional tax matter (like hiring a nanny for your new baby, who you will claim as an expense on your taxes), gather any EIN or taxpayer identification numbers you’ll need to report when you file.
Revisit your budget to max out your retirement contributions. If you didn’t max out your 2015 allowable retirement contributions (to an IRA, ROTH IRA or a small business retirement account if you’re self employed) check in with your budget, and see if you can put some additional money towards your future by April 15th, 2016.
If you qualify to deduct some of your retirement contributions based on your filing status, adjusted gross income, age and other retirement contributions), it may reduce how much you’ll owe in taxes. Lowering your AGI may also help you qualify for certain deductions that are calculated as a percentage of AGI, like unreimbursed medical expenses, and some investment expenses. Be sure to designate that you want the contribution to apply to the 2015 tax year when you make the deposit.
Block aside uninterrupted time. Once you’re confident you’ve done all the “prep” you can, set aside time to go off the proverbial grid, for at least an entire day. The filing process will be smoother, more efficient—and less stressful. Remember that most audits are triggered by silly errors and miscalculations. Take your time, and triple check everything—including your social security number, the spelling of your name, and address.