- Days left

Seven Early Tax-Filing Tips That Will Save You Time and Money

Organization helps you file your taxes earlyPersonal finance experts Ken and Daria Dolan help you get an early jump on your taxes with simple steps you can take right now that will take some of the stress out of tax season.

The National Taxpayer Advocate recently announced that Americans spend 6.1 billion hours a year on tax prep. That's almost as many hours that 3 million full-time employees work in a year.

You can easily cut down the number of hours you spend preparing your 2011 taxes by taking a few simple steps now. Trust us, tackling tax season in bite-size chunks will make the whole process less daunting.

Here are seven simple, painless tips to save time, money, a headache and hassle down the road:1. Create a system for organizing tax documents as they arrive.

There is nothing worse than sitting down to finally do your taxes and realizing that you can't find an important document. So tip #1 is to have a record-keeping system in place before the first tax document ever shows up at your house. Your system can be as simple as a large envelope or an accordion file. Just designate a specific spot and make sure that everyone in the house knows about it.

If you want to be even more organized, you can use our checklist of critical tax documents to track documents as they come in so that you know what you have and what you are still missing.

2. Review all your tax documents as they come in.

As tax documents show up, don't just stuff them into that great new tax record keeper. Take a moment to review each document as it arrives so that you can correct any discrepancies well before you start preparing your return. If there is a mistake, getting a corrected W-2 or 1099 form can take time, so don't wait until you are down to the wire on your filing deadline.

3. Make sure that you know all the 2010 tax changes that could impact your taxes.

Every year sees some new tax changes, but 2010 was a real doozy. The last-minute compromise between the White House and Republicans to extend the Bush tax cuts included a host of other tax changes. Plus, many 2009 tax credits expired. Be sure that you know the new 2010 tax rules so that you can take advantage of every tax credit and deduction possible.

4. Decide whether you are going to go it alone or hire a pro.

Thanks to our ridiculously complicated tax code (more than 18,000 pages!), even the IRS Commissioner hires tax prep help! About 60% of us have to pay a professional to help us prepare our taxes. If you are going to use a professional, make your appointment early.

If you are going to do your taxes yourself, decide whether you are going to use tax software (30% of us do). If so, you can get ahead of the game by purchasing your tax software now.

Tax software can help you find every deduction to which you are entitled and helps you avoid common mistakes that can trip you up, such as simple math mistakes (electronic returns have 13% fewer mistakes).

5. Get your tax forms now.

70% of all returns were e-filed last year, so in a move that will save $10,000,000 a year, Uncle Sam is no longer automatically mailing paper tax forms to individual taxpayers.

If you are still filing by mail, get the tax forms you will need now. You can find commonly-used tax forms at your local library or post office. You can also download all tax forms through the IRS's web site, www.irs.gov. You can even still have a copy mailed to you by calling the IRS at 1-800-829-3676.

6. Start gathering your tax information now.

There's no reason to wait until the heat of the battle to start organizing the tax information that you already have. Even before you receive a single tax document here's how you can get a head start:
  • Make a list of all your 2010 tax payments and tax refunds
  • Gather all those receipts that have piled up throughout the year
  • Comb through your credit card bills and checkbook to look for possible deductions
  • Tally up charitable donations
7. Start early!

There's no sense in putting off the inevitable. Use these tips to get a big of a head start on the tax season now and save yourself headache and heartache as the tax deadline looms.

As you dive into your 2010 taxes, make sure you don't overlook these important 2010 tax changes and be sure to make your tax deductions air-tight.

More from Dolans.com:

Critical 2010 Tax Changes You Need to Know

Tax Document Checklist

How to Make Your Tax Deductions Airtight

Increase your money and finance knowledge from home

Banking Services 101

Understand your bank's services, and how to get the most from them

View Course »

What is Inflation?

Why do prices go up?

View Course »

TurboTax Articles

Are You Exempt From Health Care Coverage?

The Affordable Care Act, or Obamacare, is an individual mandate that requires all eligible Americans to have some form of basic health coverage by 2014. Those without insurance will receive a penalty when they file their tax returns ? that is, unless they have an exemption. TurboTax's Exemption Check can help you find out whether or not you qualify for an exemption.

Essential Tax Forms for the Affordable Care Act

The Affordable Care Act (ACA), also referred to as Obamacare, affects how millions of Americans will prepare their taxes in the new year. The law now includes penalties for all who haven?t obtained health insurance -- and those penalties are expected to be paid at tax time. The ACA also provides tax credits to help people pay for insurance, and you can claim those credits when you file your taxes. The Internal Revenue Service (IRS) has introduced a number of tax forms to accommodate the ACA.

Mortgage Refinance Tax Deductions

When refinancing a mortgage to get a lower interest rate or obtain more favorable loan terms, you're really just taking out a new loan and using the money to pay off your existing home loan. In general, the same tax deductions are available when you're refinancing a mortgage as when you're taking out a mortgage to buy a home.

How to Determine if You Have Minimum Essential Coverage (MEC)

The Affordable Care Act, also known as Obamacare, requires most Americans to have health insurance that meets a government standard known as "minimum essential coverage," or MEC. Whether your insurance qualifies as MEC depends not on the plan itself, but on how you obtained your coverage.

Rental Property Deductions You Can Take at Tax Time

Rental property often offers larger deductions and tax benefits than most investments. Many of these are overlooked by landlords at tax time. This can make a difference in making a profit or losing money on your real estate venture. If you own a rental property, the IRS allows you to deduct expenses you pay for the upkeep and maintenance of the property, conserving and managing the property, and other expenses deemed necessary and associated with property rental.

Add a Comment

*0 / 3000 Character Maximum