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TAX TIP No. 1
8 tax-filing moves you can make now
Earlier is better when it comes to
working on your taxes, for both you and the Internal Revenue
Service. By getting a head start on tax preparation,
you avoid the last-minute rush, when many filing mistakes are made. And the sooner the tax agency gets your return, the sooner it can process it and get your refund
on its way to you.
Here are eight ways to get a jump on your
taxes long before the April 15 deadline rolls around:
1. Track
down your rebate data. Did you get an
economic stimulus payment last year? That amount
really was an advance credit against your 2008
return. The amount you received in 2008 could
affect your 2009 credit claim. If you got less
than the maximum amount, which for most employed
taxpayers was $600 per single filer ($1,200
for married couples filing jointly), you might
be able to claim the rest of it this filing
season. All versions of the individual tax return
(Forms 1040, 1040A and 1040EZ) have a new line
to claim the Recover Rebate Credit. You'll need
the statement you got from the IRS in connection
with your payment. That's the amount you'll
use to determine if you can claim more on your
2008 return. So find that rebate statement now.
2. Get ready
for the arrival of records. When your
W-2s, investment statements and other tax-related
documents start coming in, create a collection
point and put them there. It could be as simple
as a large envelope. You might have received
a few documents in December, but most will arrive
throughout January. Just make sure that whenever
the material shows up you put it all together
in an accessible place, so when you are ready
to fill out your return you have all the data
you need. Remember, the IRS gets a copy of most
of these, too, so figures on those statements
are critical to ensuring your return sails through
the system.
3. Track
down Social Security numbers. Before
the IRS will process any return, the agency
must have your correct Social Security number,
as well as your spouse's, if you file jointly,
and those of any dependents you claim. These
numbers are crucial because so many transactions
-- income statements, savings account interest,
retirement plan contributions -- are keyed to
them. The IRS also checks the identification
numbers against any tax breaks you apply for,
such as the Child Tax and Additional Child Tax
credits, credits for educational expenses and
the dependent care tax credit. So make sure
everyone in your tax family has a valid Social
Security number and that you have them written
down correctly. It wouldn't hurt to put this
information in that envelope where you're stashing
your incoming tax statements.
4.
Find your forms. Slightly more than half
of all taxpayers filed their returns electronically
last year, meaning all the forms were provided
in the tax software. The other half who filed
the old-fashioned way will get a tax packet
in January, but it never hurts to have backup
forms in case you make a mistake. Plus, your
tax situation may have changed, meaning you
need material other than what's in the IRS package,
since it's based on your past filing history.
A few of the most common forms are available
at post offices and libraries. Most of the rest
can be downloaded from the Internet. Check out
Bankrate's
tax forms library or the IRS'
Forms and Publications Web page.
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