Yahoo Finance How to Get a Jump-Start on Filing Your Taxes
This year, the Internal Revenue Service will kick off tax season and start accepting 2017 tax returns on Monday, Jan. 29. For some taxpayers, the delay can make a difference in their financial lives, since they rely on their tax refund to pay down credit card debt or rebuild their emergency fund. Fortunately, there are a few things taxpayers can do to get a jump-start on their tax return and get their refund faster.
The fastest way to receive a tax refund is to e-file your return together with direct deposit. The IRS reports that nine of 10 taxpayers will receive their tax refund within 21 days or less. During the 2017 filing season, 75 percent of taxpayers received a tax refund, with the average amount at about $3,000, according the IRS.
[See: Answers to 7 Burning Tax Questions.]
E-file is easy if you have your necessary information in hand. If this is your first time filing or using e-file, it is important to think ahead before you sit down to do your taxes. Follow this checklist to help you avoid the scramble and make tax-filing a breeze.
Here is the key information you need for e-filing:
1. Social Security numbers for yourself, your spouse and dependents. One of the most common mistakes taxpayers make is including incorrect Social Security numbers, causing them to miss out on valuable tax credits and deductions, according to the IRS.
2. General income information from forms such as W-2s and 1099s. Be prepared with any retirement or Social Security income information.
3. Business income and expenses information, including rental property, farm income and partnerships or trusts. Especially if you are self-employed, it is important to collect all your income and expense documents in one place before you file.
4. If you have enough expenses to itemize your deductions instead of taking the standard deduction, gather your receipts for tax-deductible expenses. One of the biggest deductions that taxpayers who itemize can get is the mortgage interest deduction. You should receive Form 1098, which will include your tax-deductible mortgage interest. It may also include your tax-deductible property taxes that you paid if they are impounded with your mortgage. If they aren't included, have your property tax bill in front of you for your property taxes assessed for 2017.
5. Educational expenses reported on Forms 1098-T and any additional ones you paid. Plus student loan interest reported on Form 1098-E.
6. Child care expenses paid, including whom you paid and the child care provider's tax ID number or Social Security number.
7. A copy of last year's tax return. It's always helpful to have a copy of the previous year's return. When you file online, the IRS now requires you to have your prior year adjusted gross income in order to e-file.
8. Bank account and routing numbers for direct deposit of any refund you may receive.
[See: 10 Smart Ways to Spend Your Tax Refund.]
Another reason to get organized and file early is that you may qualify to file for free. Approximately 70 percent of filers qualify for free filing, according to the IRS. Depending on the tax software you use, you may qualify if you made less than $100,000, didn't own a home or rental property, didn't sell any investments or didn't have any major medical expenses.
[See: 13 States Without Pension or Social Security Taxes.]
If you happen to owe money to the IRS, you may still want to file your tax return as soon as you can. If you submit your tax return in the middle of January, you do not have to pay taxes you owe until the April 17, 2018 tax deadline. Preparing your taxes early will give you time to figure out how you're going to pay. You may even be able to contribute to your IRA by the tax deadline and reduce the amount you owe on your 2017 taxes. Just make sure you let your retirement plan administrator know you are making a contribution for 2017.
More From US News & World Report
