Before beginning your taxes, there are a few things you need to get ready. March is a great time to make sure you have all your tax information in order to you can complete your taxes by mid-April when they are due.
#1 Look Through Your Bank Account Records
Get together your bank account records for the past tax year or see if your bank has an end-of-the-year summary you can look at. Going through all your transactions is a great way to check and see if there are any deductibles that you have overlooked when thinking about the past year. Maybe you forgot about the computer you purchased for your freelancing efforts, or perhaps you forgot about the money you donated to your alumni matter last February. Reviewing your statement is a good way to remind yourself of the deductibles that you may have forgotten about.
#2 Look Through Your Credit Card Statement
Next, pull out your credit card statements and go through the same process. Looking at your credit card statements may help you remember expenses that you can deduct that you have forgotten about. Your credit card statement may also be able to help you double-check expenses that you already remember and need to review.
#3 Get Together Your Receipts
Once you have a solid idea of potential deductions and tax credits, it is time to get together all your receipts and documentation. You need to be able to have evidence of any deductible you claim on your taxes, and the best evidence are receipts or bank statements.
#4 Look Over Your Investments
Finally, take some time to look over your investments. You need to make sure all of your financial institutions you worked with send you your 1099 forms for your investments. Look at these forms, as well as your regular statements, to get an idea of all the figures you will need for your taxes.
You need to have a solid grip on the interest, dividends, and capital gains you made with your taxes. You also need documents of any investments that you made this year or that you sold this year. Verify the accuracy of your 1099 forms with your regular statements and paperwork.
Spend a few hours getting together all the evidence and proof you need to do your taxes before you start the actual tax forms. That way, when you sit down to do your taxes, you can focus just on filling out your tax reforms, not searching for documents every time you get to a new section on your taxes.
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