Ready or Not…
Tax time is here!
By Ron Hatfield, WVU Extension Financial Management SpecialistWe’ve all heard the adage: “the only things that are certain are death and taxes.” The time is here for documenting your 2010 income and pay taxes to the state and federal governments. Here are a few tips and developments that may impact your tax return.
- Find and store last year’s returns for easy access. In fact, you should always retain the last seven year’s tax returns with your family financial records.
- Gather the social security numbers for all members of your family and others that may be claimed as dependents on your return. A lost social security card and number is one of the top delays in completing personal returns.
- Gather and carefully store all of the W-2 forms sent to you. Your employers should have these postmarked and mailed no later than January 31st.
- Keep track of your 1098 interest paid forms which is useful for reporting mortgage interest and student loan interest paid when itemizing deductions.
- Keep track and report interest earned on 1099 forms. These will come from your banks and other entities that pay interest on your holdings.
- Gather records on self-employment income and other income not already reported to the federal government.
- Consult a qualified tax preparer for questions concerning individual deductions for expenses incurred in 2010. However, avoid high-fee, high-interest refund loans offered by many preparers. Use direct deposit into your bank account with your return to receive your refund faster without the additional fees of a loan. Preparers would not offer these rapid loan services unless it was extremely profitable.
Other developments in recent tax years:
The IRS isn’t processing some tax returns until the middle of February, because of recent changes to tax laws. This affects taxpayers who:
- Itemize deductions,
- Claim the higher education tuition and fees deduction,
- Claim the Educator Expense deduction,
- Claim the General Business Credit,
- Claim the first-time homebuyer credit,
- Claim an electric vehicle or biofuels credit, or
- Claim certain other credits or deductions that are listed on the IRS.gov web site.
Taxpayers in one or more of the preceding categories should wait until mid to late-February to file a return with the IRS.
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