February Monthly Challenge: Prepare Your Taxes Early
The IRS estimates more than 150 million tax returns will be submitted in 2016. While filing taxes isn’t exactly known for being fun, settling with Uncle Sam doesn’t have to be complicated. In fact, you can be ready to go in three easy steps!
For February, our monthly challenge is to prepare your taxes early. Here’s how you get started:
1. Gather your forms. There are all sorts of documents you might need before filing your taxes—W-2s, 1099s, and Schedule Bs to name a few. Some deal with your income. Others involve your deductions, interest you’ve paid on mortgages or student loans, or investment income you’ve collected. Make sure you have all your forms together before you start filing.
2. Decide how you file. Choosing between tax software and a tax professional can put even decisive people at a crossroads. Research the options and decide what works best for you. Just a tip from us: We’ve seen people get more money in their tax return by using a tax professional to look over their numbers. A tax pro can help you identify the documents you’ll need from Step #1 and make the process a whole lot more enjoyable.
3. Determine the best time to file. April 18—which is the deadline for 2016 because of how the calendar falls—is still a couple of months away. Even so, filing early can be good for two reasons. First, you can finish the process and get it off your mind sooner. Second, if you need to pay taxes to the IRS, you still have time to save the money you owe.
Preparing your taxes is the hard part. Once that’s done, you’re home free! Take a deep breath, do a little dance, and share the good news with EveryDollar! Tag us in your Facebook and Twitter posts with the hashtag #TaxTime. Let’s show everyone that preparing to file your taxes early is a big money win for 2016!