Tax day is April 15, 2019, and even though the deadline to file your taxes is still a couple of months away, you should start preparing now. Whether you are doing your own taxes or seeking help from a tax professional, these are some things you can do now to prepare.
1. Gather Last Year’s Information and Personal Information
Start your tax preparation by gathering last year’s tax information. Previous year’s refunds or payments will factor into your taxes. If you own a business, be sure to have your tax ID on hand. If you are just looking to file personally, be sure to have your social security number, a valid driver’s license or ID, and your spouse’s personal information if applicable.
2. Gather Dependent Information
If you are going to claim dependents (children or elderly) on your tax return, you will also need their social security numbers, dates of birth, and other information. Some of the other information that you may need are adoption papers (if applicable), child care payment records, or death certificates. If you are collecting alimony payments, you will need your ex-spouse’s social security number too.
3. Income Information
You should receive your Form W-2 by January 31, 2019, from your employer. This form shows your wages/salary, federal and state withholdings, and any tips or earned income credits. If you are filing with a spouse, you will need their Form W-2 also. Some people have various sources of income that require a separate form. For a comprehensive list of forms, visit the IRS website.
4. Note Any Deductions and Decide on Itemized or Standard Deductions
Big life events like having a baby, buying a house, or getting married may result in a sizable deduction. List out anything you might receive a deduction for. Another thing you need to do is decide whether you want to itemize deductions or use a standard deduction. If you itemize your deductions, you will need receipts for everything. The choice you make will depend on the nature of your situation, but a tax professional will help guide you to the route that fits your needs best.
5. Have Your Banking Information Ready
Getting a tax refund is always exciting. No longer do you have to wait for your refund check to come in the mail. You can instead set up a direct deposit straight to your bank account. Once your federal and state taxes are filed and accepted, your refund will show up in your account!
Get your taxes done early this season and enjoy your refund sooner! If you need help figuring out your information for direct deposit, stop by or log into your Points West Community Bank account online!