A simple tax time checklist

Double check everything on your tax returns!

Did you know that as of 2015, the federal tax code, including all the laws and regulations, has grown to over 10 million words in length? That’s enough to make anyone’s head spin and 72% of Americans surveyed by Pew Research in 2015 believe the federal tax code is too complex.  After all, the PDF instructions to complete the most basic federal tax Form 1040 for 2016, is currently 106 pages long.

But, it doesn’t have to be so complicated for everybody. If you have regular income from a job which provides you with a Form W-2 and you are currently married or single and do not itemize your deductions, taxes do not have to be a complicated chore. Additionally, with some easy new ways to file taxes for free you can check the status of your refund online. Here’s a simple checklist:

  1. Report all your income. You might mistakenly think that if you didn’t get a Form W-2 or Form 1099-MISC, that you do not need to report any additional income you received. All of your income is taxable unless it is specifically exempt, as in the case of full time students, for example. Remember, anyone who pays you money is also required to report that payment as an expense. If the IRS notices a large discrepancy there, they can flag your tax return to rectify the difference.
  2. Use IRS “Free File” if applicable to you. If you earn less than $64,000, you can use the new IRS Free File e-file service directly through the IRS website to do your simple return quickly and receive your return quickly. The IRS partnered with branded software products for the first time in 2017 to provide this service, so you know it is reputable. If you earn more than $64,000, you can use the IRS Free Fillable Forms to file for free as well.
  3. Double-check your return for errors. You want to look for more than just math errors. Check that the bank routing number and bank account number listed for your refund direct deposit are correct along with all social security numbers, birth dates and name spellings. Any other clerical errors, such as the wrong number of dependents, could result in delays of your refund as well as you paying more in taxes than you need to. In the worst case, interest and penalties can be charged on any amount you owe
  4. Get a signed, completed copy of your tax return. If you decide to hire an outside professional, such as a certified public accountant, an enrolled agent, or someone from the local H&R Block, check the credentials of the tax preparer first. Then, make sure they provide you with the completed copy of your tax return including their signature and their Preparer Tax Identification Number (PTIN), which is required by law. Do not pay anyone who does not have this number or asks you to sign a blank tax return.
  5. Check “Where’s My Refund.” If you’re waiting for your refund after you’ve already completed and filed your return, you can use the IRS “Where’s My Refund” Tool to check the status of your refund, no matter how you filed it. You can check the tool at least 24 hours after the IRS has received your e-filed tax return or 4 weeks after mailing your paper tax return. The information is updated every 24 hours.
  6. Start keeping better records for next year. Every time something new in your life happens that you spend money on such as a marriage, a child, college courses (or continuing education), a new work vehicle or a divorce, keep a record of it in a special “tax time” folder.  This way, while you may have forgotten some important expenditures and changes in your life throughout the year, you will have these important items handy at tax time to help your tax preparer maximize your taxes.

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The author is a paid contributor to the Shopperfund Blog.