It’s that time of the year again; tax season is almost upon us! This year, before filing, think of ways to keep more money in your pocket as well as the best way to maximize your return. After all, the money you get back from taxes is money you LOANED the Federal Government. Why would you pay to get YOUR money back?!
Develop a game plan before you file. If you are unsure on whether or not you need to file click here, or if you are not sure what your filing status is click here. The website www.irs.gov is an excellent resource to answer basic tax questions.
Instead of going to a tax preparer such as H&R Block or Jackson Hewitt who charge expensive fees to file your taxes, why not check to see if you are eligible to get your taxes done for FREE? Situations in which you may qualify to have your taxes done for free include but may not be limited to: if you made less than $50,000.00 last year, have a disability, are elderly, or are a limited English speaking individual who needs assistance in preparing tax returns. You may be eligible to get your taxes done for free at Free Tax preparation locations. You can find Free Tax preparation locations online at www.gatewayeitc.org or you can download the “IRS2GO” app to your smart phone.
When you go to file your taxes, materials that you should bring include:
- All W-2(s) and 1099(s) for the tax year you are filing
- Social Security Cards or Individual Taxpayer Identification Numbers (ITIN) for all family members
- Valid picture ID for taxpayer and spouse (Driver’s License, State ID, or Passport)
- If married filing jointly – both spouses must be present to sign
- Copy of 2014 tax return is helpful but not required
- 1098 or real estate tax receipt
- Proof of unemployment compensation
- A copy of a “voided” check or bank account and routing numbers for direct deposit
- Proof of child care expenses with the EIN or social security number of the provider
- Parcel number (Illinois homeowners only)
- Form 1095-A (proof of health Insurance from Marketplace if you received this form)
Get your tax refund a few days sooner by having it directly deposited into your checking account. Bring a voided check when you do your taxes. If you do not have a checking account, this is an excellent time to think about opening an account at a financial institution of your choice. Having your tax return directly deposited also avoids the funds potentially being placed on hold or having to pay costly fees to get your refund check cashed.
Tax season should not be about getting a large sum of money in which you then go purchase large ticket items you will have either forgotten or possibly have nothing to show for by the end of the year. Tax season is an opportunity to explore new ways to invest your money as well as develop new saving habits. Some positive options to think about are opening up a Roth IRA or any other type of savings account.
Remember, tax season is great and who doesn’t like getting back money that is rightfully theirs? The key factor is what you choose to do with your refund. Choose options that are going to have a greater, more positive impact on your future!
By Evette Baker, Financial Education Specialist, Prosperity Connection