For the next couple months, you will likely be seeing people standing on street corners with signs advertising tax services and countless TV ads for tax preparers promising fast refunds. There will be kiosks set up in malls and departments stores with tax preparers on the spot. Maybe you are like one-third of all Americans who take the task upon themselves and prepare their own taxes.
Whether you dive right in as soon as you get your W-2s or you procrastinate until the day before they are due, you know you have to set aside hours to learn any new applicable laws, gather your information and calculate what you owe. You may use tax software, some other digital method or the old-fashioned paper forms. Whichever way you choose to file your tax return, there are some important things to remember.
Get it together
Hopefully, you have been careful about keeping your tax documentation in one safe place throughout the year, holding on to important receipts and filing away all the forms from your employers and other accounts over the past months. You may have any of the following that will be important for filing an accurate tax return:
- W-2 forms calculating your wages
- 1099s reporting interest, dividends, investment earnings and other benefits
- Income adjustment forms 5498 for IRA contributions, health savings or medical savings accounts
- Form 1098 for tuition or student loans
You may also choose to itemize your deductions, in which case you will likely need things like a 1098 for your mortgage interest, receipts for business and medical expenses, and proof of charitable contributions.
Save the date
Tax day is typically April 15. However, this year, April 15 falls on a Sunday, and Monday, April 16 is a federal holiday in Washington, D.C. Therefore, your tax deadline for this year is actually April 17. Filing on time is essential, even if you owe money and are unable to pay. Filing late may result in penalties that could further damage your financial situation.
Instead, tax experts recommend you file anyway and send the IRS whatever you can. By meeting the deadline, you improve your chances of qualifying for an installment agreement or other forms of relief.
Don't let complicated taxes frighten you
Since Ohio is among the many states that collect taxes in addition to federal income tax, you will likely have to file a separate return for state taxes. In many cases, you can complete your state tax returns using the information on your federal forms. However, if you have made a mistake on your federal returns, that may carry over to your state taxes, creating many complications.
If the thought of all of this overwhelms you, or your taxes are a complicated mess, you may seek the assistance of a professional. However, for real peace of mind that you may not find in a cubicle at the mall, you may turn to an attorney with experience dealing with the IRS and Ohio tax authorities. Such an attorney can also be helpful if you need to negotiate your payments with the IRS.