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Do your own taxes? Make sure you follow these 15 tips


Tax season is upon us and millions of people are hoping for a refund or, at the very least, to minimize what they owe. Whether you file your taxes early or procrastinate until the last minute, knowing a few basics can help you put more money in your pocket.

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Here are 15 tax tips you need to know before filing your taxes:

1. Find out if you need to file

If you need help determining whether you’re required to file a federal tax return this year, use the IRS’ online interactive tax assistant. You need to answer a few basic questions about your filing status, gross income, and whether you’ve been withheld federal income tax, then the IRS tool can help.

2. Collect Social Security numbers

To prepare any tax return, you’ll need your Social Security number, the nine-digit piece of information that follows you throughout your life.

“Make sure you have Social Security numbers for yourself, your spouse, and any dependents,” said Kay Bell, tax reporter for the blog Don’t Mess With Taxes. She added that to apply for some credits, such as child and dependent care credit, you’ll need to provide a Social Security or other identification number.

3. Determine your filing status

Your filing status is based on your marital status on the last day of the tax year and applies to the entire tax year. There are five possibilities:

If you legitimately fall into more than one category, choose the one that requires you to pay the least taxes.

4. Review your previous returns

Pull out previous year’s federal and state tax returns. The information will help you get started on your tax return because some of your line items will be the same. Other entries will ask you for missing information or forms you need to collect.

Also, you may need to make adjustments if you’ve had major life events in the past year, such as getting married or divorced, having a child, going to school, or changing jobs.

Take our survey: How much tax refund do you expect in 2023?

5. Gather your documents

For income information, you’ll need forms you’ve received from employers and banks, which may include some of the following:

  • Form W-2 (salary)

  • 1099-INT (interest)

  • 1099-DIV (dividends)

  • 1099-B (sale of investments)

  • 1099-MISC (self-employment, royalties)

  • 1099-R (pension distributions)

  • K-1 (MLP, Partnership or S-Corp income share)

  • SSA-1099 (Social Security Benefits)

  • 1099-G (Unemployment Compensation and State Tax Refunds)

  • W-2G (game winnings)

  • 1099-C (debt forgiven)

Next, if you’ve made any income changes, you may need one of the following forms:

Finally, if you file your deductions or receive tax credits, you may need forms such as:

  • 1098 (mortgage interest)

  • 1099-LTC (long-term care allowance)

  • 1099-SA (HSA/MSA Distribution)

  • 1095-A (insurance market statement)

  • 1095-B (health coverage)

  • 1095-C (employer-provided insurance coverage)

You will also need any personal receipts for expenses such as charitable contributions, unreimbursed employer business expenses, medical bills, and moving expenses.

6. Know which deduction to take

If you’re not sure whether you should itemize your deductions, there is a relatively easy way to determine the best choice for your situation. “If you have enough itemized deductions to exceed the standard deduction, please specify. If you don’t, take the standard deduction,” said accountant Eric J. Nisall, founder of AccountLancer, which offers accounting assistance for freelancers. tell me what to do.”

If you don’t specify, you are in the majority. Only about 30% of taxpayers detail their deductions.

7. Know the deadline to file

The date for your federal tax return is April 18 due to the fact that April 15 falls on a weekend.

8. File your federal tax return for free

Free tax filing is available to taxpayers who meet certain requirements: The IRS offers a free file in which you can file your federal taxes without paying any fees. The version you can use depends on the amount of your adjusted gross income.

If it’s under $73,000, you can use available free archiving software.

9. Deduct your medical expenses

If you specify deductions, you may be able to deduct specific medical expenses for the costs of diagnosing, treating, mitigating, treating, and preventing disease. These costs include payments made for medical services provided by doctors, surgeons, dentists and other physicians. Costs also include expenses for equipment, supplies and diagnostic devices. Additionally, you may be able to deduct:

However, you must meet a threshold before you can deduct those expenses. You may deduct qualifying medical expenses that exceed 7.5% of your adjusted gross income on Schedule A (Form 1040).

10. Deduct travel for medical care

If you drove to a hospital, doctor’s office or dental office for medical treatment in 2022, the cost of getting to and from the facility or office is based on variable costs.

11. Deduct your mortgage interest

If you paid interest on a mortgage, the interest amount may be deductible if you specify deductions. You may also be able to deduct interest on a second mortgage or home equity line of credit. Be sure to obtain a Form 1098, a statement of mortgage interest, from your lender if you’ve paid $600 or more in mortgage interest.

12. Correctly deduct charitable donations

If you want to claim a deduction for charitable contributions, you need to itemize your deductions, Nisall said. “Any single cash donation over $250 or non-cash donation over $500 should have a receipt in your records—and it would be ideal to have a receipt for any donation,” he added.

However, not all donations are deductible. For example, you can’t deduct the full amount of your donation if you received a benefit such as an elegant dinner at a fundraiser. You need to subtract the fair market value of the meal from your donation amount.

13. Gather health insurance tax documents

You may receive a Form 1095-A, Form 1095-B, or Form 1095-C for coverage for medical care you had or was offered to you. This is another important document to keep track of for tax filing purposes.

“You and each member of your family must have qualifying health insurance coverage for each month of the year, or qualify for a waiver from the coverage requirement — or make an individual shared liability payment when you file,” Bell said. “Filers who get coverage from the market will need Affordable Care Act 1095 forms to ensure they are filing properly. If you have coverage through your workplace, you will simply need to check a box on the return.

14. Find out if you qualify for EITC

If you worked in 2022 but had low to moderate income, you may qualify for the earned income tax credit. You don’t need to itemize your deductions to receive this tax break because a tax credit reduces the amount of tax you owe. You may even get a refund. The requirements are strict, so the IRS provides an online EITC assistant to help you figure out if you’re eligible for this benefit.

15. Report your unemployment income

If you weren’t employed in 2022, you may think you don’t owe any income tax. However, if you have received unemployment benefits, you must declare it and pay the taxes you owe. So, don’t ignore that 1099-G you have. “The Internal Revenue Service also received a copy,” Bell said.

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Taylor Bell contributed to the writing of this article.

This article originally appeared on GOBankingRates.com: Doing Your Own Taxes? Make sure you follow these 15 tips

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