Prepare for Tax Time

Tax Time, I hate it. However, there are a few things I do to prepare.

Start only when feeling sharp, refreshed, and clear headed. If there are errors, it will only delay that return you need so badly.
Have a space where you can leave your papers and documents out for a day or two, and do not have to be gathered up for the evening meal.
Use the free tax services online instead of the expensive tax prep places. Even this old non-tax-savvy granny can do it.
Read the instructions on the site carefully. Mistakes can be made. Read your answers over carefully and double check your figures, even if you are sure you made no errors. You may be surprised to find that info you type often (name,soc. sec. # etc.) can have a typo because of haste.
If you get too frazzled, stop and take a break. A walk, cup of coffee, time with the family etc can give your brain a fresh jump-start.
Have a quiet environment to do your taxes in. Pets running, or kids playing loudly are not helpful to detailed work.
Have all your papers together before you even start. Searching for important stuff can break your concentration and cause some confusion. (Where was I now?)

These sound almost too simplistic, but are important. I always have to relearn a couple of them each year. Hard to form good habits in this when it is only an annul occurrence.

Hope all of you do great financially this coming difficult year.

Source: This is just what I have learned to keep things simple while preparing taxes. I help raise four grand-daughters, and need to be organized as possible.

By Phyllis from Wisconsin

By adriarobi

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By 01/25/2010

I keep folders for each of my accounts and for deductions such as for charitable contributions. During the year, I download the data of each of them (some accounts aren't available past a month or so, meaning manual entry would be the alternative) and balance them monthly. I attempt to match the receipts at that time, although some of them trickle in later, for I track the sales tax paid, which is a chore I choose to avail myself of due to the standard deduction being so much less vis-a-vis my state's sales taxes that peak at 10%.

I use TurboTax, which goes on sale the middle of every January at Costco for $10 off. I get started as early as possible, but never attempt to do it all in one sitting. I write notes along the way for things requiring more research. It's a methodical approach that works for me. It's always a great feeling to get done, but if there's time, I sit on it a few days and come back to it with a clearer mind. One might even try explaining it to someone else!

By 01/25/2010

All great tips, I'm especially loving the reminder to shut out the distractions; my dog is normally my shadow, but she takes a hike with Dad when it's tax time:)

The only other thing I'd add to these already comprehensive ideas would be--if you itemize on Schedule A rather than take the standard deduction--is to do your deduction totals monthly throughout the year instead of waiting until tax time to wade through piles of receipts. A little paperwork at the end of every month makes it easier to wallow through when it's time to sit down with your IRS forms.

By 01/25/2010

Good advise if you qualify, but I don't quality for free tax prep or free filing. With free file you have to have a modest enough income and a return that pretty basic. I have to purchase TurboTax Home and Business which allows me free filing. Cost be close to $90 but I file for 5 friends and family and can e-file all of them.

By 02/13/2009

Very good advice. One that's helped me over the years is when you accumulate tax info. I have plastic folders that snap shut. The red one is for taxes (go figure) and all year long, anything I THINK might be tax deductable goes into that folder for the next time I do taxes. For those that use the long form, you won't believe how much stress that takes off you.

By 02/13/2009

great advice. we too follow the same path to prepare ours. one year my husband did everything perfect>but checked the wrong box as to where to recieve the refund and there was no going back to correct it so now we print out the sheet and do a test one to double check. I just cannot believe the people who want the fast money and pay $300 to get it back in a few days when they waited all year for tax time to come around anyway and just waiting that 10 extra days will give them more money to be able to use.