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It’s That Time of Year Again! Are You Ready to File Your Taxes?

 

Congratulations, this year you have until April 18 to file your taxes! That’s because Emancipation Day, a holiday observed in the District of Columbia,  falls on Friday, April 15 this year. By law, D.C. holidays impact tax deadlines in the same way that federal holidays do.

However, no matter the date you will still need to be ready to file your taxes. Here are some pointers to consider to help you get ready. First off, have you located all your necessary paperwork such as:

  • W-2 forms, 1099’s,
  • Social Security information,
  • receipts and
  • last year’s return?

Did you receive other forms related to loans and your mortgage on your home?  Make sure you have all these together.

What about filing options?

Have you decided whether you’re going to go to an accountant, a tax service store, or if you’re going to try and go at it alone? Well, before you click on that tax preparation site or call that tax professional, here are a few things to consider.

  • As of mid-February 2015, the IRS already issued more than $125 billion in refunds for the tax year. The majority of taxpayers usually receive a refund. Many people plan their withholding so that they receive a fat check at tax time.
  • The remainder of American taxpayers break even or may even owe money to the government. This happens to some self-employed individuals, some people who over-estimate their withholding allowances, and people with other income from outside sources.
  • Of course, you should take advantage of any and all tax benefits. But, if you have a lower income and your tax liability is easily zeroed out through basic deductions, you may want to just take the standard deduction and try to qualify for other benefits, like refundable credits (which can be added to your refund).
  • However, if you have a higher tax liability that’s not immediately zeroed out, you may want to compare the ins and outs of every income or tax-reducing scenario to get your liability down as much as possible.

The Affordable Care Act impact to taxes

The Affordable Care Act, or Obamacare, has added even more variables into the tax filing equation. This winter, many taxpayers received new year-end forms providing them with information about health coverage they had or were offered. The new forms include Form 1095-B and Form 1095-C. While the information on these forms may assist you in preparing a return, they are not required. Like last year, taxpayers can prepare and file their returns using other information about their health insurance. To find out more about these year-end forms, see these questions and answers on IRS.gov.

So, there is no need to wait until the last minute to finish preparing and filing your taxes.  Get organized and finish early.

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