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The Early Tax Essentials

By Laura - Freelance Writer - Article Added ( 11/20/2009 )

As tax season approaches, don’t fall prey to filing late. Start now, so that you can maximize your tax return. The following three helpful tips will get you into the proper mindset for filing your taxes to your best benefit.

Make Sure to File Your Taxes on Time. The deadline for filing taxes each fiscal year is April 15th.  It is always in your best interest to make sure that you file on time. However, specific circumstances may make filing by this date impossible; in this case, file Form 4868 in order to obtain an extension. Filing late may result in the IRS charging a late filing penalty of 4.5%. As said before, the safest policy is to begin collecting your information early, so that you don’t run into problems immediately before taxes are due.

Utilize Your Resources. Many people don’t seek help in filing their taxes, but in order to maximize your return, it is a good idea to at least do some research. The IRS makes information on filing taxes accessible to the general public through its website, www.IRS.gov, and the IRS also provides a toll free hotline (1-800-TAXFORM). From here, you have access to numerous fact sheets, checklists, and helpful tips that will help you file on time with all the correct information. For many people, hiring an accountant or meeting with a consultant is necessary, and helps alleviate the stress of tax season. There are also many helpful online agencies that provide software and other services. For those experiencing financial difficulty, the IRS has an umbrella organization called TAS (The Tax Advocate Service). This organization is confidential and provides services specific to those with significant economic need.

Do Your Research and Be Aware of What Information You Need to Collect. Many people lose money in their tax returns, because they do not take the time to consider all their deductions and opportunities to save. First of all, it is very important to itemize your deductions. Many people find it easier to take the standard deduction, but personal itemized deductions are more beneficial on the whole. Consider the contributions you have made to charity. Throughout the year, you should be keeping track as you donate which organizations qualify for tax deductions. The IRS can provide verification through its website, if you are unsure if your charity qualifies. If you feel that you have underpaid your taxes throughout the year, you still have the opportunity to make a last minute payment before filing. Underpayment can result in a large bill as well as an additional penalty. Lastly, make sure to accurately claim your dependents. If you are divorced, make sure that both parents agree on who will receive the exemption. Also be sure to have accurate identification of the dependent. Oftentimes, a social security number will suffice, but in certain situations, other identification such as a birth certificate is necessary.

Source: mbl

About The Author: Laura G

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