89: Essential Tips for Preparing for Tax Season

• Brief Summary of objectives (3):
  • It's important to identify some effective strategies for tax season that can simplify the process for you. 
  • We'll discuss deductions and explore what could be beneficial for your situation. 
  • There are numerous items you'll want to collect for your personal tax needs. 

Call to action: Take charge of your tax season and ensure you're prepared to file your taxes well before April 15th arrives.

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Transcript

• Brief Summary of objectives (3):
   
  • It's important to identify some effective strategies for tax season that can simplify the process for you. 
  • We'll discuss deductions and explore what could be beneficial for your situation. 
  • There are numerous items you'll want to collect for your personal tax needs. 

Topic 1: Here are a few essential tips for preparing for tax season 

• You can make the process smoother and less stressful. Here are some key strategies to help you get organized and maximize your benefits:
   
  • Gather Your Documents Early: Start by collecting all relevant documents, such as W-2s, 1099s, receipts, and records of deductible expenses. Having everything in one place will make filling out your tax return much easier.
• Understand Tax Deductions and Credits: Familiarize yourself with the deductions and credits you may be eligible for. This could include education credits, mortgage interest deductions, or energy-saving home improvements.
• Use Tax Software or Hire a Professional: Depending on the complexity of your financial situation, you may benefit from using reputable tax software or consulting with a tax professional to ensure accuracy and potentially uncover further savings.
   
  • Talk about VITA: The University of Georgia Extension service offers the free Volunteer Income Tax Assistance program to assist qualified individuals with preparing their tax returns. This program is a partnership between the UGA Charles Schwab Institute and the UGA County Extension Service and allows students in tax preparation classes to have experience preparing returns for clients across the state. Someone in a county (a client) would bring all the necessary documents to the Extension office during an appointment and the agent would then share the documents with the students in Athens and they would prepare the return and have it quality reviewed by a certified volunteer. After the return has been completed and quality reviewed, the client would come back to the office and go over their return via Zoom with the student who prepared it and allow the taxpayer to ask any questions they may have. To complete the process, the student preparer will electronically file the return, and the taxpayer waits for their refund! The process is completely free of charge and keeps taxpayer’s money in their pockets while providing a good learning experience for our future professionals! 
• Keep Track of Changes in Tax Laws: Tax regulations can change from year to year. Stay informed about any updates that could affect your filing process or liability.
• Plan for the Future: Consider contributing to retirement accounts or making charitable donations before the end of the year to take advantage of potential tax breaks.
• Organize Receipts and Records: Throughout the year, maintain organized records of any expenses that may be deductible. This will save time and reduce stress when it's time to file.
• Review Previous Tax Returns: Examining past returns can provide insights into deductions or credits you might have missed and help you prepare more effectively this year.
• By following these tips, you'll be better prepared for tax season and can approach it with confidence, knowing you're making the most of your situation.

Topic 2: Why would we need deductions?  

• Websites: https://www.irs.gov/forms-instructions 
• There are lots of deductions depending on your life situation. Itemizing these deductions can be possible, or taking the standard deduction might be your best route. 
  • Home and Vehicle Ownership form 1098, real estate, receipts for energy-saving home improvement, all other 1098 series forms. 
  • Charitable donations: cash amounts donated to a house of worship, schools, or other charitable organizations. And can be amounts of miles driven for charitable or medical purposes. 
  • Medical Expenses: this can be the amount paid for healthcare, insurance, and to the doctors, dentists, and hospitals. If you paid outside of your insurance premium. 
  • Health insurance which is form 1096-A
  • Childcare expenses this is the fees paid to a licensed day care center or family day care center for an infant or preschooler. Amounts that you paid to a babysitter or provider care of your child under the age of 13 years while you work. 
  • Educational Expenses which is form 1098-T for a educational institutions, receipts that are itemized for educational expenses that qualify, records of any scholarships, or 1098-E for student loans interest. 
  • K-12 Educator Expenses these are if you are a teacher claiming classroom expenses 
  • Retirement and other savings
  • Federally Declared Disaster 
• The threshold for Standard Deductions changes with each tax year and also differs if you are filing single or married. The decision whether to itemize your deductions or take the standard will be largely dependent on the total amount you have to itemize and if it exceeds the standard deduction allowed. 

Topic 3: Remember the items you need!  

• There is information that you are needing to gather if you haven’t already gotten it all pulled together for your tax filing! 
• Personal Information: 
  • You’ll need to grab your personal information of social security number, your spouse’s full name, social security number, and date of birth. 
  • If one has been issued an Identity Protection PIN (yourself, your spouse, or your dependent by the IRS)
  • Your direct deposit information  
• Dependent(s) Information that you’ll need:
   
  • Dates of birth and social security number 
  • Childcare records 
  • Income of dependents or other adults in your household
  • If you are in a custodial parent, you’ll need a form 8332
• Sources of income:
   
  • Employed: W-2 
  • Unemployed: 1099-G
  • Self-Employed: 1099, Schedules K-1, 1099-MISC or 1099-NEC, records of all expenses, office in home, record of estimated tax payments made
  • Rental Income
  • Income and expenses, rental asset information for depreciation, or estimated tax payments made
  • Retirement income
     
• 1099-R, Traditional IRA, Social Security SSA-1099
• Saving, investments, or Dividends 
  • Interest dividend income such as 1099-INT, 1099-OID, 1099-DIV
  • Sales of stock or other property
  • Health Savings Accounts (1099-SA) 
  • Investments expenses
• Other incomes:
   
  • Can be things such as hobby income & expenses, prizes and awards, trust income, royalty income, state tax refunds, gambling income, payment card like a 1099-K, tip income 
• Checking or Savings Account Info: 
  • If you would like to have your refund direct deposited, you will need to provide a checking or savings account number and routing information. Direct deposit is recommended for a quicker and more reliable refund process.

Call to action: Take charge of your tax season and ensure you're prepared to file your taxes well before April 15th arrives.