It’s that time again, tax season is drawing near and those W-2 forms are pouring in. How many jobs did you have this year? Did you have a side hustle? Gig economy is going strong and most gigs are fun and simple. However, along with this new gig trend is a new chic attitude. What’s that? Frugality and doing things for yourself without having to spend too much at all. Another aspect,is learning how you can get as much as you can out of the tax situation.
Here,we will give you the system of doing taxes yourself in 10 steps. You’ll see how simple it can be. Now, just a heads up. This is for simple returns. If you have a business or have a complicated situation, always use a company likeJayhawk Advisors to discuss your financial matters. At worst,you could trigger an audit and at least you could miss out of credits,deductions and write offs you never knew existed.
Do you need to file?
We’re spoiled by our tax guy or gal. Or our go-to company like Jayhawk Advisors Why? Because they’ll ask two pertinent questions and know straight away whether we need to file. It’s easy to figure it out. When you do your own taxes, you may forget to check and just waste time and effort filing for no reason.
Stick to the deadline:
Let’s put it this way. Your W-2 forms go out in January and latest in February. This is more than enough time to start. There’s not much excuse. Think of it this way:If you get a return early that’s extra money for you. You can kill bills and debt early and get it out of your hair. April 15th is the date. Don’t worry if it isn’t a weekday. This year, for instances April 2020 is the 16th. It will always be in your favor!
Get Organized:
One thing you need to do is make sure you don’t have over one year to file. Did you file last year? Are you on a payment plan with the IRS? Did you complete any payments with them? Do you have the paperwork that proves payment? You need to have this together and have filed for missed years before you file this year. You don’t want to have a mess if you have a paper missing and cause an audit or penalty.
Gather all the forms you need for your situation:
According to Taxslayer, the forms you need are for any of the following circumstances.
Income and Investment information:
This means all the income you had coming in.This can be from jobs,hobbies,child support,alimony,etc.
Bank Statements and student loan debt papers:
Bank statements for regular accounts and investment accounts. Some investments require you pay taxes on them. If you have student debt you are paying off on a plan, make sure you have the right form for that. Forms – 5498 and 1098-E. Did you give to charity over $500?
If you have a mortgage, you’ll have to complete the 1098 mortgage form.
Did you have any income from speculative gains? Gambling or lotto? This can be done on Miscellaneous income.
If you worked as a freelancer or any other non W-2 work then grab all the 1099 forms to see where you fit in.
These are:
1099 misc, DIV, G,K, and R
Now, if you have any type of business where you are receiving regular income from clients. You must have these forms filled out as well.
These are:
Your business write off expenses. This means anything you pay for to see and work with clients. You may be able to claim gas and even lunches with clients. Be careful with this though. Be honest and have proof in receipts so you don’t trigger an audit.
Are you paying quarterly? Then make sure you send in a copy of that proof of payment.
Expenses from your home office: This is where your fuel and office supplies and printing etc come in. Even your phone bill if you have a separate line or you can prove the people you speak to regularly are clients.
All the other documentation are medical expenses and for your home ownership.
7. Find out if you should itemize your deductions also.
8. Do not forget to pay state taxes if it applies to you.
9. Go back and check every detail.
If you have more than two or three of these forms we strongly suggest you use an electronic filing company. They will take you through a series of questions and make sure you aren’t missing anything. There is typically a nominal cost attached. If it’s too complicated then hire a professional. It you make too many mistakes you’ll end up paying possible fines.
10. File it asap electronically and on time.
Or, if you must send in documentation then do so very early. We suggest January or February latest. If any issues arise you may be able to rectify it quickly
