Five Steps to Help You Prepare for Tax Season
Income tax returns are not due until April 15, but, it’s never too early to start planning ahead. The earlier you file, the sooner you will receive your refund (if you’re expecting one). Whether you plan to file your taxes online using TurboTax or sit down with a tax specialist/accountant, you will want to have the appropriate documents and be prepared to make some important decisions. Here are five steps to take now:
1. Get ready for the arrival of records.
If you don't already have a tax file, select a single location (even if it's just a large envelope) to collect your W-2 forms, financial statements, and other tax-related documents as they arrive. If you receive records electronically, create a "2018 taxes" folder or subdirectory. If you are filing jointly with a spouse, make sure you both know and agree on how you plan to organize and store your documents. There is nothing like finding a document after your taxes have been filed and realizing you will need to file an amended return with the IRS…just get it right the first time and avoid the headache!
2. Consider contributing to an individual retirement account (IRA).
Most Americans can contribute $5,500 to a Roth or traditional IRA for 2018 ($6,500 for those age 50 and older) until the tax filing date. Of course, you will want to consult a tax professional to see if they recommend a contribution. If you qualify, an IRA contribution can reduce the amount of taxes you owe.
3. Decide how you want to do your taxes.
Be diligent in deciding who you trust with your sensitive information. If you choose to do it yourself, filing online is easy and affordable. Many of our members trust TurboTax, plus they receive a discount just for being a CAMPUS Member!
If your taxes are more complicated, you may choose to seek the services of a professional. The cost of using a professional tax preparation service is typically more than doing it yourself, but, sometimes the additional cost is worth the peace of mind of your taxes being filed correctly. Beware of scams though! Check the tax professional’s references, ask friends and family for recommendations, and make sure their license is still valid with the IRS. Don’t let your sensitive information fall into the wrong hands! Â
4. Consider electronic filing.Â
Taxes filed electronically are processed faster than paper ones, and refunds are issued within 3 weeks. Alternatively, if you file your tax return on paper, it will take 6 to 8 weeks to receive your refund. This filing season, taxpayers with an adjusted gross income of $66,000 or less in 2018 can file Federal taxes for free via the IRS program. Other online options include TurboTax, which offers a discount for CAMPUS USA Credit Union members.
5. Use direct deposit.Â
Regardless of whether you file electronically or on paper, consider having your refund check directly deposited into your savings or checking account. It's another way to get your return faster! Be prepared to provide your financial institution’s routing number and your account number. If you have any questions on which number you should provide, call your bank or credit union to verify your information.
Notes:
The Tax Cuts and Jobs Act was enacted in December 2017 which made changes to tax rates and Federal income tax withholding. To learn about these changes and how it will affect filing, visit the IRS website: https://www.irs.gov/tax-reform
CAMPUS USA Credit Union does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
By CAMPUS USA at 18 Jan 2019, 09:35 AM