There's a chance that you already have your employer-issued tax forms in hand for 2014. There's also a very good chance that you haven't worked out the details of who or how you're going to prepare your returns. Fortunately, you have until April 15th to file…just don't wait until then to figure out your game plan.
If you're not sure how to proceed with your newly arrived tax forms, it's a good idea to review some filing basics. This can lower your stress level come April, when so many others will be scrambling to file and pay taxes on time. The key to a successful return preparation can be attributed to several elements, not the least of which is preparedness.
So, you have your tax forms, but do you have them all? If you're a W2 employee, the answer may be "yes", but it's up to you to recall all of your income from last year and every employer you might have worked for. Remember that income reported by an employer but not by you can land you in trouble, as well as saddle you with a tax debt. It's also important to verify that everything you've received on your tax form(s) is correct. Confirm that your income matches and your personal information is accurate. If you had a debt discharged or reduced last year, such as a partially forgiven credit card debt, this information should be thoroughly substantiated.
It might seem premature to start sorting out what deductions and credits you can take, but planning now can save time and energy later. Consider all of the benefits you may be able to take advantage of with a little research and how you might reduce your liability – or even see more money back on your return. If you haven't previously taken the time to explore potential credits and deductions, do a little legwork online and prepare to be dazzled. You may be able to take advantage of mortgage deductions, education credits or explore deductions for any financial misadventures.
The consensus regarding death and taxes seems overshadowed these days by the looming health care reporting necessary on this year's tax returns. Whether your health plan is private, employer-provided, through the Marketplace exchange or nonexistent, you'll be required to include the details on your tax forms. Do your research now in order to understand what forms you should be receiving in the mail (they will vary depending on your coverage elections). In the event that you're going to owe the penalty for insurance gaps, you can begin to estimate how this affects your refund, or adds to any tax liability.
After reviewing all of the preliminary information for your return, you're ready to consider whether or not to get help from a professional preparer. This decision will be largely based on the complexity of your employment history for 2014, as well as financial and family considerations (again, take those deductions!). With the mere addition of healthcare reporting, you may elect to use a professional simply for peace of mind. Make sure that if you do seek assistance from a tax specialist, you have all the necessary information for he or she to help you make the most of tax season.