Countdown to Tax Day: Tips to make prepping your taxes a little less taxing

Mar 25, 2013 | Personal

Whether you prepare your own taxes or have a trusted professional do it for you, taxes are a certainty — with a fast-approaching deadline! Here are a few tips to make prepping your taxes a little less taxing.
First, simplify. Make the process less daunting.
Start with a folder. Place necessary documentation in said folder as you receive them throughout the tax year or as arrive after year end.
Programs like Quicken allow you to clearly see all your transactions through the year, without having to pore over your bank statements and checks — a tedious process.
Second, know what you need.
Here are some suggestions of key categories of information you’ll likely need to collect:

  • personal info (like account and routing numbers for refund direct deposits)
  • income info (W-2s, investment info, SSI and unemployment benefits, alimony received, miscellaneous income like scholarships and contest winnings)
  • adjustments to increase or decrease what you owe (i.e. for student loan interest paid, IRA contributions, moving expense records, health insurance for the self-employed),
  • supporting documentation if you’re pursuing deductions or credits (child care and education costs, charitable donations, casualty and theft losses)
  • paid taxes (state and local income, real estate and personal property, car licensing)
  • etc. info (tax payments already made if you’re self-employed, prior-year refund applied to this year’s)

Paths fork after you’ve asked yourself the following question: “How am I preparing my taxes this year?”
If you’re foregoing the challenge (or headache, depending on how you see it) and hiring a tax guy or gal, is this person someone you can trust?
It’s not enough to rely on references. The IRS offers a list of great points to keep in mind when choosing a tax preparer. (
After all, you’re opening your financial life up to these people. Let the following raise red flags:

  • – Your prospect makes promises; i.e. “I’ll get you a bigger return than the guy next door” or “I’ll get your refund faster (for a fee, of course).”
  • –  They want to charge you based off of a percentage of your tax refund.
  • – They’re evasive about their credentials, or do not have an affiliation with a known or trusted organization.

If your tax situation is particularly complex, it may be prudent to enlist the help of a certified public accountant, attorney, or an enrolled agent who specializes in taxes.
Not only can a qualified preparer minimize the risk of your being audited, but he or she can provide expert guidance on “most overlooked” deductions — from expenses associated with job hunting and airline fees, or available tax credits, such as those available for improvements to make your house more energy efficient or to reduce the burden of costs associated with child care while you work.
A good partner on this front can help you set up a great filing system to make this process a breeze, so we can do it all over again (effortlessly) next year!