People approach tax season differently; some tackle their tax returns as soon as the year begins, while others find themselves scrambling in April, wondering where their W-2 went. If you identify with the latter, this guide is for you.
Tax season is universally dreaded not only for its potential costs but also for its infamous reputation for being time-consuming and puzzling. The barrage of forms and intricate questions can leave you questioning if you even understand your own financial situation, making filing your return a less-than-enjoyable task.
Despite the challenges, navigating tax time is a necessary endeavor, and with some guidance, even the most stressed individuals can manage it. Whether you’re considering hiring an accountant, completing your tax return independently, or seeking information on how to better prepare for the future, continue reading for helpful tips and strategies to conquer tax season. You’ve got this!
When is the deadline?
The filing deadline for most American taxpayers to submit their 2023 tax return and pay any owed taxes is Monday, April 15, 2024. This date also marks the deadline to file for an extension, which extends to Monday, October 14, 2024, if needed. As late filing penalties can be costly, it’s crucial to start organizing your tax documents now!
Although the impending deadline may seem intimidating, filing your tax return is a task that’s often blown out of proportion—while occasionally bothersome and inconvenient, it’s entirely achievable!
Do you need an accountant?
Whether you require an accountant or tax professional to assist with your taxes depends on your individual circumstances. While hiring an accountant can be costly, it could potentially lead to a higher refund, as tax professionals often secure greater deductions. If you have a complex tax situation, such as owning a business or undergoing significant life changes like marriage, homeownership, or welcoming a child during the year, engaging an accountant might be advisable. Additionally, consider the time needed to prepare and submit your tax return independently. If time constraints, lack of interest, or fear of costly mistakes are concerns, hiring a tax professional is a viable option.
When searching for the right accountant, start by asking acquaintances for recommendations, as their tax situations are likely somewhat comparable to your own. Alternatively, H&R Block and Jackson Hewitt have numerous locations across the U.S. and offer a wide range of tax services at reasonable prices.
It’s important to note that you may encounter individuals advertising themselves as “bookkeepers” rather than accountants. So what sets them apart? While accountants typically have specialized training, potentially including a college degree, bookkeepers face fewer regulatory requirements. While hiring a certified accountant may be pricier than engaging a bookkeeper, it could be worthwhile for business owners or individuals with complex tax issues. For most individuals filing standard individual returns, a bookkeeper should be capable of handling the job effectively.
What about DIY options?
For individuals with straightforward tax situations, various online tools are available for self-filing. If you’re single, have no dependents, work for an employer, and face a relatively uncomplicated tax scenario, managing your own taxes is feasible for most. In such cases, hiring an accountant or bookkeeper could be an unnecessary expense, especially considering the user-friendly tax software programs on the market. H&R Block and TurboTax offer free DIY online tax software for simple returns, with paid comprehensive options available for more intricate tax situations.
Making Sense of All the Forms
If there’s one thing synonymous with tax season, it’s the multitude of forms to complete. While this list isn’t exhaustive, it covers some common forms you’re likely to encounter when preparing and filing your taxes.
- Form 1040: Used to file your taxes, Form 1040 is where you declare your filing status, detail deductions, claim credits, and calculate your income tax.
- Form W-2: Employers issue a Wage and Tax Statement (W-2) to employees and the government annually, outlining wages and tax withholdings. If you had multiple employers throughout the year, you’ll receive a W-2 from each.
- Form 1099-NEC: Freelancers or contract workers receive a 1099-NEC, reporting non-employee compensation for side gigs without formal employment agreements.
- Form 1099-MISC: Used for miscellaneous income like rent, royalties, prizes, and awards.
- Form 1098-E: Reports interest paid on student loans, potentially eligible for tax deductions.
- Form 1098-T: Documents qualified tuition and related education expenses for potential education-related tax credits.
Hacks and Tips You Should Know
The tax-filing process can appear overwhelming, especially with a looming deadline. To assist you on your tax-filing journey, here are some helpful hacks and tips:
- Organize your forms and receipts throughout the year, storing them securely for easy access during tax season and minimizing the risk of misplacing essential documents.
- Verify if any life events have altered your tax status. Marital statuses, dependents, or other changes should be reflected in your tax return.
- Explore all potential deductions and credits, including student loan interest, health insurance premiums, charitable contributions, and homeowner expenses.
- File on time! Missing the April 15, 2024 deadline could result in fines.
- Retain important documents for at least six years to facilitate IRS audits; exceptions exist but generally, documents should be kept for this duration.
