3 Home Buying
April 02, 2018
1. Be organized and plan Your Taxes early on
First and foremost, I am not a tax professional and this shouldn’t be considered tax advice as you should always ideally you should hire a professional CPA to help you with your taxes. With that being said, for those people who want to do taxes themselves, my first tip would be plan and complete your taxes as early was you can. During the first few months of the year, you’ll probably receive several tax-related documents in the mail. These can include:
- A W-2 form from your employer
- 1099 forms from other sources of income, such as interest or dividends, or contract or freelance work
- A 1098 form showing mortgage interest and property taxes paid if you’re a homeowner
- A copy of your HUD-1 statement
- Form 1095 showing health insurance coverage
Just to name a few. Have all of these together in once place before you sit down to start your return.
Normally you can easily import your data into most tax software programs, saving you time and reducing errors. You enter some basic information and the program retrieves the details of your W-2 or 1099 form. If you use the same tax software you used last year, you might also be able to import most of your data.
Which leads me to the next point – refer to last year’s tax return to give you a foundation for your taxes. Your tax situation will have one major changed – a home purchase. The rest from the previous year’s return should give you a good idea of what your income will be, the deductions you can claim and which forms you need to file.
2. Tax Deadlines Are Clearly Important
Getting right to the point, the deadline to file your 2017 personal income tax return does not fall on the usual April 15 this year, because that’s a Sunday, and April 16 is Emancipation Day in Washington, D.C., which is a holiday. Therefore, Tax Day falls on April 17, 2018 this year. Your best bet is NOT waiting until the last minute to file, or even worse to just outright ignore the tax-filing deadline. You’ll face civil or criminal penalties if you don’t file a return. If you are waiting till the last moment to send in your taxes, you have two options. Either send them out electronically or get to the post office early because you will be waiting in line with others waiting until the last minute as well. Many software programs will let you file your federal return for free but charge you to file your state return. Read the fine print before you make your choice.
3. Start planning Next years Taxes Right now
Once your return is complete, you now have a good idea of everything that you will need for next year’s tax return. Start keeping tax-related documents organized throughout the year and collect tax forms in a folder as they come in during tax season so you don’t have to scramble to meet next year’s tax-filing deadline.
Finally, promise yourself that filing your tax return at the last minute won’t become a normal habit. Think about it like this- If you file your taxes next year early, and you are owed money from the government, you will get that money sooner rather than later.