July 1, 2020
Our New Jersey tax accountants stress the importance of doing these 4 things to prepare for 2020 tax season.
- Have all your personal information in order. People often underestimate the details of their personal information they will need in order to file returns. For yourself, you will need your name, Social Security number or tax ID number, as well as those of your spouse. If you have children, you will need to file them as a dependent and will need the following information for them: 1) their dates of birth and Social Security or tax ID numbers; 2) childcare records (including the provider’s tax ID number) if applicable; 3) income of other adults in the home and 4) if applicable, Form 8332 showing that the custodial parent is releasing their right to claim a child to the noncustodial parent.
- Gather all the necessary documents. The documents you will need to file differ depending on your employment status. If you are employed by someone else, you will need to obtain Form W-2 from your employer. Self-employed filers will need Forms 1099 and Schedules K-1, as well as income records to verify amounts not reported on the 1099. Retirees must file their pension or IRA, as well as Social Security income. A more extensive list of necessary documents can be found here.
- Claim deductions. Claiming deductions reduces your taxable income and saves you money on your bill. Before filing your returns, know which expenses may qualify for deduction, such as educational expenses, medical bills or state and local taxes. Before filing each deduction, make sure you have the appropriate documentation for each, such as invoices and receipts.
- Utilize copies of last year’s returns. It is not completely necessary, but if available, a copy of last year’s tax returns can help you compare income levels and expenses that may have varied from year to year. It saves the headache of crunching numbers and filing expenses from last year that can end up hurting you.
The professionals at Frank W. Kapitza & Associates are experienced in the field of tax filing and will give you piece of mind by promptly taking care of your returns. If you haven’t hired a tax professional yet, it’s not too late. Contact us today to save yourself the headache of tax filing this year.