With tax season quickly approaching, taxpayers are beginning to gather their information and prepare their tax returns before the rush this spring. With this comes frustration and confusion about what material and information is necessary for correct filing, which can often be a nightmare for taxpayers and accounting services alike. Kim Dorion, owner of H&R Block in Rhinelander, shared some tips for taxpayers as well as common errors that can lead to bumps along the road in correct filing.
One of the first steps in preparing tax returns is to have a complete count of all report statements. “It’s essential for people to wait until they’ve collected all return statements before filing” said Dorion. “Quite often, people will have been unemployed or held part-time positions early in the tax year and will have misplaced or forgotten their statements, which, if not included in a return, can lead to filing an amended tax return.” Poor recordkeeping often results in taxpayers having to file an amended tax return, which not only can be a hassle, but a costly one at that. Organizing records by date and category will eliminate stress when it comes time for retrieval. Dorion also advises taxpayers who may be self-employed to keep good records of all business expenses from throughout the year.
It’s important that taxpayers filing their own returns are knowledgeable about education credits. There are several education-related tax benefits, so figuring out which credit or deduction to use is often confusing to taxpayers.
“We frequently find that taxpayers who have prepared their own returns have missed some deductions or credits in this area,” Dorion said. “Having an understanding of each credit or deduction before filing a return can make a considerable difference in accuracy.”
It is also important to make sure that all dependents’ Social Security information is included the return, as well as accurate birthdates and last names. “Because the IRS uses this data to match information, providing inaccurate information about any of the dependents will create an error in the filing process,” she added.
In particular, Dorion advises local taxpayers to be patient when preparing their taxes this season. Because of changes in legislation, there may be some potential delays in certain forms being released, which may require changes in some online filing software. Although most people try to beat the rush and conquer this task as soon as possible, Dorion advises taxpayers to handle the process slowly to avoid any unresolved software glitches resulting from legislation changes.
Aside from the changes in legislation, the IRS has made a significant alteration in their method of receiving returns electronically. For the 2013 tax season, the IRS won’t be accepting electronic returns until after Jan. 22; however, this implementation doesn’t prevent taxpayers from submitting their returns to local accounting services.
Whether choosing an accountant to handle returns, or filing them one’s self, it’s important to have patience and understand choices and methods beforehand. Researching accountants and software programs can give taxpayers a jumpstart on the tax season before it arrives.