Many New York adults must prepare and file their taxes each year. If you want to avoid paying someone else to do your taxes, filing them yourself is possible. Considering the importance of correctly preparing your taxes, a few important tips can help you achieve this goal.
Saving the right documents
You’ll save yourself time and hassle during the tax planning process by being a good record keeper throughout the year. Plus, you’ll want these documents if you’re ever someone the IRS audits. Since audits date back three years, you’ll want tax-related records dating back that far.
Typically, the documents you want to save are:
- Income-related documents: W-2s, 1099s and bank statements
- Expense-related documents: Invoices, receipts and charity donation statements
- Insurance records
- IRA and 401(k) statements
Watching out for new credits and deductions
You might owe money to the IRS for the current tax year. Fortunately, credits and deductions can help minimize how much money you have to pay the IRS. That said, it’s essential to know that the IRS often introduces new deductions for taxpayers. Staying aware of these changes can save you a lot of money at tax time.
Standard vs. itemized deductions
A primary but vital factor to consider is whether you want a standardized deduction or if you’d rather have itemized deductions. Taking the standard deduction typically makes filing your taxes much quicker than itemizing each deduction. However, you might either owe less or receive more money back if you go through the process of itemizing your deductions.
Everyone’s tax situation is different. If filing your taxes is more complicated than entering a few W-2s, having a professional assist you with preparing your taxes could be best.