If you’re a new filer, congratulations on surviving your first tax year! You may have been nervous, but you probably found out it was easy to file…especially if you used TurboTax. Younger filers typically don’t own a home, didn’t sell a bunch of stocks, and likely don’t yet own a business. So you may have filed a Form 1040-EZ or 1040-A, right?
If this was your first tax filing year, I bet you learned a few things. Here are some lessons learned you can apply for next year:
Set Up a Checklist Now
Your tax situation next year will be probably very similar to this year. Even if you experience some life changes you can use the taxes you filed this year as a guide for next year. Keep a checklist of all the tax documents you expect to receive. This checklist is crucial because you can start gathering your documents in one place throughout the year so you have everything ready to go when you sit down and file for your tax refund next year.
If you do have any life changes, keep in mind you may have some additional forms to keep track of. For instance, if you buy a house, expect to get tax forms related to your mortgage. If you have a child, you may have child care expenses you can claim. As these changes occur throughout the year, you can track related receipts and documents so you will be ready at tax-time. Don’t worry about knowing tax deductions and credits related to life changes. TurboTax will remind you of life changes that impact your taxes by asking you simple questions and will give you the tax deductions and credits you deserve based on your answers.
Did you dive into self-employment this year? Don’t worry. TurboTax and QuickBooks Self-Employed has you covered. You can track your income and expenses, mileage, and capture your receipts year-round and then the information can easily be exported to your TurboTax return.
File as Soon as Possible
Did you get a tax refund this year? If so, try to file as early as possible next year so you get your money faster. Your checklist and gathering everything in one place will help you file early so you can get your tax refund sooner.
When you do file, remember to do so electronically with e-file. If you do that and request a direct deposit of the refund – you can get your tax refund in just a few weeks.
As for the forms, employers and payroll companies are required to send out W-2s by January 31st. Financial institutions must send out a Form 1099-INT by January 31st. If those are the only forms you need, then you can file as soon as the IRS starts accepting tax returns.
Keep a Tax File All Year
The most time consuming tax related activity you’ll do is trying to find a form you received early in the tax year. You can avoid the scramble by putting all tax related documents in a single place. This way you know where your documents are and you won’t spend hours looking for them in your house or online in your account.
I accomplish this by keeping all documents in a secure folder. All tax correspondence is scanned or printed to a PDF and saved in that folder, organized by document type. All 1099-MISC documents are in the 1099-MISC folder. My Form 1099-INTs are all in the same folder.
When you use TurboTax, you can use TurboTax MyDocs to store all tax returns you’ve filed in TurboTax Online as well as you will get access to 100 MB of self-managed storage space on our servers where you can upload and store your tax documents, such as scanned receipts, payment confirmations and tax forms.
Read This Year’s Tax Return
It’s always good to take a look at your tax return after you’re done. Read it through and see what the various sections are so you can understand your financial situation more.
You may see different things about your finances that you never noticed. How are your charitable contributions? Did you earn any dividends or interest? How might you improve your financial situations by increasing those? Your tax return is a good barometer of your financial progress so give it a look.
Also, make sure you always keep a copy of the last three years of tax returns. You also may need your previous year tax return to refer to your previous year adjusted gross income since that amount is needed in order to e-file your taxes.
Now that you’ve already done your taxes this year, following these tips and using TurboTax will help make filing your taxes even easier next year!