Getting ready for tax season

Are you ready for tax season? Here’s a handy guide to help.

It's that time of year again - tax season. Tax season is not always very fun, but it's important to be ready and organized when filing your taxes. Whether you're a first-time filer or a seasoned pro, these essential tips will help you prepare for tax season and maximize your tax savings.

Proper tax prep saves you time and stress during filing by having everything ready to go in one place, so here are some tips to help you prepare.

Gather all necessary documents

To start doing your taxes, collect all the necessary papers. This includes the W-2 forms you get from your employer, 1099 forms for any freelance or contract work, and any other statements showing how much money you earned. You should also gather any receipts or documentation for deductions or credits you plan to claim. This will make it easier and help you remember all important deductions or credits. Here’s a handy checklist of documents you may need:

• Form W-2 – Wage and Tax Statement
• Form 1099-MISC – Miscellaneous Income
• Form 1099-NEC – Nonemployee Compensation
• 1099-K, Payment Card and Third-Party Network Transactions
• Form 1099-G – Certain Government Payments
• Form SSA-1099 – Social Security
• Form 1098-T, Tuition Statement
• Form 1095-A, Health Insurance Marketplace Statement
• Form 2441 - Child and Dependent Care Expenses

Review your previous year's return

If you paid taxes last year or got a tax refund, it's a good idea to look over your tax return from the previous year. This will help you remember any deductions or credits you claimed and make sure you remember everything this year. It's also smart to review your previous year's return for any mistakes that might have been made.

Organize your documents

Once you have all your necessary documents, organizing them in a way that makes sense to you is important. This could be by category, such as income, deductions, and credits, or by date. Having an organized system will make finding the information you need easier when it's time to file.

Common tax mistakes to avoid

When getting ready to do your taxes, make sure to steer clear of common errors. These mistakes could lead to fines or a longer wait for your refund.

Some of these common errors include:

Filing late

You must file your taxes by April 15, 2024 or file an extension. This date may change each year, if it’s a weekend or holiday, then you have more time. Filing on time is crucial to avoid penalties and interest on what you owe. You can ask for more time if you can't file on time. However, you still have to pay what you owe by the original deadline.

Forgetting to sign your return

It may seem like a small detail, but forgetting to sign your tax return can result in it being rejected. Be sure to sign and date your return before sending it.

Not double-checking your information

It's important to double-check all the information on your tax return before sending it. Making simple mistakes, like putting in the wrong social security number or making math errors, can cause delays or even lead to an audit.

The importance of seeking professional help

While it's possible to prepare your taxes on your own, seeking professional help can ensure you're maximizing your tax savings and avoiding any costly mistakes.

Hiring a tax professional

If your taxes are complicated, hiring a tax professional might be a good idea. They can help you understand difficult tax laws and ensure you take advantage of all available deductions and credits.

Using tax preparation software

If your tax situation is relatively straightforward, you may be able to use tax preparation software to file your taxes. These programs guide you and can help you find deductions or credits you might have missed.

Avoid ghost tax preparers

Paid preparers must sign and include their Preparer Tax Identification Number or PTIN on the return. By not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Keep an eye out for these tax return preparers who may also:

• Require payment in cash only and not provide a receipt.
• Invent income to qualify their clients for tax credits.
• Claim fake deductions to boost the size of the refund.
• Direct refunds into their bank account, not the taxpayer's account.

Conclusion

Preparing your taxes may not be the most exciting task, but it's important. By using these important tips, you can make sure you are well-organized and have a clear understanding of how much you owe in taxes. In addition, you may be able to increase the amount of money you save on taxes.

Don't forget that you can get your tax refund up to 5 days early¹ by depositing it into your Walmart MoneyCard account!