Filing your taxes can be easy if you follow the right steps, and Cumulus Funding is here to help with some easy tips. Preparing your tax filing can be a simple process that is stress free, but is easiest to do with some basic preparation and organization. So sit down with all of your documents and read this list.
Determine your tax filing status. The statuses include: Single, married filing jointly, married filing separately, head of household and qualifying widow(er) with dependent child. You may qualify for one or more status. You can determine what status to choose by using this IRS guide.
Gather your Documents. Hopefully you already have them all right in front of you. You’ll need your W-2s, 1099s, mortgage interest statements and charitable giving receipts. Also, if you have any other receipts for deductions like education costs, home improvement or child care, bring those to the table. Keep all of these documents throughout the year in a folder or binder you can easily reach during tax time. Set aside an hour or so of alone time without distractions to get it done. If you need a guide, the IRS offers one for each document that you may need to apply, you can find these guides here.
Organize! In one folder, keep all paperwork that has to do with income. These are your W-2s, 1099s and investment interest statements. In another folder, collect all documents that have to do with deductions. These would be your mortgage interest, property taxes, charitable giving and student loan interest. The third folder is for all of your other deductions that aren’t statements sent to you. These would be things like your home improvement receipts and medical receipts.
Be on time. Make a giant note on your Calendar for April 15th. You must file your taxes by this day. Income and Investment interest forms are mailed to you by January 31st. If you don’t receive your tax statements it’s time to make some phone calls. You’ll need to get that paperwork as soon as possible to have plenty of time to file your taxes.
File your taxes. You can do this yourself or hire someone to do it for you. There are computer programs available that will walk you step by step through the process of filing your taxes. Once you’ve decided the avenue in which you’d like to file your taxes, file them as soon as you can. As long as it’s before April 15th, you’re good to go. Remember to save these documents for seven years after you file them. Don’t worry, if you make a mistake, just file a 1040-X form. This is a form that tells the IRS that you’ve made a mistake and will be amending your tax statement.
At Cumulus Funding, we have some customers who choose to begin an Income Share Agreement around this time of year to help them pay their taxes, if needed. Our structure works well for this and other one-time expenses because we can fund our customers as quickly as in one business day. For our current ISA clients, receiving a tax return can be a great way to repurchase your contract with us. This is a great way to save money in the future and something we love to help our clients do.
By following these steps, you can file your taxes and create a system to organize your taxes for years to come… all it takes is a little time and effort. Remember to plan ahead, start early and organize, that way filing your taxes will be easy every year. While there is no fanfare or confetti once you send your tax filing, preparing your taxes and filing them can be a rewarding experience. Especially if you get a tax refund!