American Institute of CPAs offers 10 tips for filing your 2011 tax return
Tax season is here again. While individual tax returns are not due until April 17 this year, America’s CPAs remind taxpayers that not waiting till the last minute will make filing easier and the process smoother.
Here are 10 questions and answers from the American Institute of CPAs to help make sure you pay no more taxes than you should and to give you peace of mind that you’ve done everything required.
Q. How do I get ready to file my tax return?
A. Gather your W-2s and 1099s. The simplest thing to do is also the most important: Keep the W-2 and 1099 forms you receive where you won’t lose them and where you can easily find them. You can’t complete or file your returns without them.
Q. What else do I need to do?
A. Collect your other records: Round up all of the receipts, canceled checks and other documents that support the income, deductions, and credits you’ll be reporting or claiming on your return. This is especially important for taxpayers who keep their paperwork in the proverbial “shoe box.” Whether you prepare your return yourself or work with a Certified Public Accountant, the better shape your records are in the more likely you will be paying only what you owe. More tips to get started preparing your tax return are available on the AICPA’s 360 Degrees of Taxes website.
Q. When is my federal tax return due this year?
A. You have two extra days this year. Your 2011 tax return must be filed by midnight Tuesday, April 17.
Q. How do I know if I can take some special tax breaks?
A. Know if you qualify: Many taxpayers don’t think about the special tax provisions that may apply to them and often pay more tax than they need to pay because of it. The special provisions include the earned income tax credit, the child tax credit, the American opportunity credit and the adoption credit. Check with your local CPA or the official IRS website to see if you qualify.
Q. What are some deductions I might be able to take?
A. Take advantage of everything the tax code allows: Your 2011 tax return could be your last chance to claim credits for energy-efficient home improvements or other provisions that are set to expire at the end of this year unless Congress extends them. Expiring provisions include deductions for tuition and fees, educator expenses, mortgage insurance premiums, and the option to include your state and local sales taxes paid as an itemized deduction. Review some tax savings strategies on the AICPA’s 360 Degrees of Taxes website.
Q. Can I deduct my health insurance premiums if I am self-employed?
A. It depends. If you’re self-employed, you may be able to deduct 100 percent of health and long-term medical costs for yourself, your spouse, and your dependents. This deduction is taken as an adjustment to income and it can only be taken if the self-employed person or spouse is not covered by an employer health insurance plan.
Q. How should I prepare and file my tax return?
A. Consider all your filing options: There are many different ways you can complete and file your tax return. You can prepare it yourself or go to a professional tax return preparer. You may also be eligible for free face-to-face help at an IRS office. And e-filing will make that last-minute dash to the post office unnecessary. Don’t wait to the last minute; give yourself time to weigh all the different options and find the one that best suits your needs.
Q. What should I do if I don’t understand something?
A. Get answers to your questions: You’re not alone. Regardless of whether they’re basic or advanced, you need and deserve answers to the almost inevitable questions you’re going to have about what you owe, how you complete your forms and how you file. The official IRS website is a great place to find answers to the standard questions. And your local CPA can help you determine how the law applies to your specific situation. The AICPA’s 360 Degrees of Taxes website includes an Ask a CPA feature. The worst thing to do is not to ask.
Q. What is the fastest way to get a refund?
A. Direct deposit: If you choose to have your refund directly deposited into your bank account, you’ll receive it considerably faster than a paper check.
Q. What can I do to speed up processing my tax return?
A. Review! The most common mistakes made by taxpayers – incorrect Social Security numbers and bad math calculations will slow down the refund process. The good news is that they’re also the easiest to correct if you take the time to check your return before it’s filed.