Get Ready for Income Taxes – Here’s How

By Mike Peterson
In March 20, 2013

Still waiting to file your 2012 income taxes?  The deadline to file is April 15, so you’ve got time – but not much.  Sure, there are probably lots of things you’d rather do than sit down with a year’s worth of paperwork – but if you do a little prep work beforehand, you can take a lot of the stress out of the process.

 

Want to ensure a super-easy, stress-free tax season?  Whether you’re doing your own taxes online or making an appointment with your local tax-prep chain, this handy list will help you get organized.

 

Gather Income-Related Forms

The first thing you’ll need to do is gather the appropriate forms for all income you earned in 2012:

 

  • If you work a traditional job (as in, you work for one employer and you earn a salary or hourly wage), your company should have provided you with a W-2 form.
  • If you’re a freelancer or you do contract work, you’ll need to file a 1099-MISC form for each job in which you earned $600 or more.  If you’re filing jointly, you’ll need to make sure you have the proper forms for both you and your spouse.
  • If you collected unemployment in 2012, you’ll need a 1099-G form.

 

And remember: “Income” also includes any interest you earned from a savings or checking account; Social Security; loans or grants for college; or a pension.  If you earned money from any of these sources in 2012, you’ll have to account for it when you file your taxes.  Also, if you’re filing jointly, you’ll need to make sure that you have all necessary forms for your spouse’s income, too.

 

Break Out the Receipts

You can claim all sorts of deductions on your income taxes – but in order to get a few breaks on things like child care or business expenses, you’ll have to have proof in the form of receipts.  Here are a few of the more common deductions:

 

  • Child care
  • Medical expenses
  • Home office expenses (if you telecommute or work in a “virtual office”)
  • Business travel expenses
  • Continuing education
  • Mortgage interest
  • Student loan interest
  • Charitable donations (you can get a credit for cash donations as well as for donations of physical items, like clothing, furniture, or vehicles)

 

For a comprehensive list visit the IRS’ Credits & Deductions page.

 

Organization Tip:  Receipts

Feeling overwhelmed by receipts?  Try one of these cheap and easy ways to keep your documentation neat and organized:

 

File folders:  Create a file folder for each type of expense.  Keep all of your receipts and other documentation in the appropriate file.  When it’s time to do taxes, you don’t have to sort through a bunch of piles.  Manila folders or large envelopes work well, too.

 

Shoeboxes:  If you’ve got a lot of receipts (for, say, business expenses), you might want to use larger, sturdier boxes instead.

 

A three-ring binder:  Low on space?  Keep everything in a single binder.  You can buy folders or pouches to keep your receipts separated by category.

 

Want to get a jump on your 2013 taxes?  Pick a system and start filing your receipts now.  Then you don’t have to spend hours wading through piles when tax time rolls around.

 

 

Have Last Year’s Tax Return Handy

One of the best ways to make sure that you aren’t forgetting a source of income or an important deduction is to check your return from last year.  Can’t find it?  No worries.  You can request a transcript from the IRS’ website.  You can also order by phone at 800-908-9946.

 

Before you order, you’ll need to have your Social Security Number, date of birth, your address, and your ZIP code.  And if you do need to order a transcript, don’t wait:  It can take 5 to 10 days to receive it after you order.

 

Other Items You’ll Need

Depending on your unique situation, you may need a few other odds and ends.  If you have any investments or capital gains or losses, you’ll need documentation.  Same goes for contributions to IRA accounts.

 

Also, make sure you have a Social Security Number for everyone in your household (you, your spouse, and your kids/dependents).

 

See?  That wasn’t so bad.  Income taxes may never be fun, but they don’t have to be overly complicated.  Get organized, get your taxes out of the way – and start planning how you’ll put your tax return to good use!

 

How do you get organized for tax time?  If you have any hot tips, I’d love to hear about them.  Leave me a comment and let me know!

Mike is the author of “Reality Millionaire: Proven Tips to Retire Rich” and he has been published in a variety of local and national publications including Entrepreneur Magazine, Deseret Morning News, LDS Living Magazine, and Physicians Money Digest. He holds a B.S. in business administration from the University of Phoenix.