4 tips for tax filing

Once again, the inevitable tax season is upon us. Follow these tips to help you get through the hassle without breaking your sanity or bank account.

  • Make sure your tax pro is filing online so you can get a quicker refund. The IRS claims the e-file option is fast, secure, accurate and those who elect for a direct deposit can get their refund in as little as 10 days. Unfortunately, if you're filing for a new homebuyer credit, you still have to file a paper tax return. Regardless, be sure to remember what your grandma always said — don't spend it all in one place!
  • Keep track of your paper trail. The Internal Revenue Service has three years to audit returns, so they suggest holding on to your paperwork for at least three to seven years. If you still have paperwork from the '80s, it's time to let it go — along with the frosted perm, stirrup pants and splatter-paint Keds.
  • Consolidate the clutter. If your pile of receipts has gotten out of control, try photocopying as many as you can onto a single sheet of paper. It will be easier to organize your invoices, save room and keep your accountant from being buried under an avalanche of paperwork.
  • This is a year to die for. Due to a loophole, there's no estate tax in 2010. However, this could change and be re-enacted retroactively, so consult a tax preparer to avoid IRS trouble. If Aunt Betty was worth less than $3.5 million, you have nothing to worry about — except what to do with her Precious Moments collection.

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Tips for filing your 2012 tax return with the IRS

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You still have the option to use paper forms to file your taxes, but many people now e-file due to the faster processing time. (Photo by Katie Jacewicz)
You still have the option to use paper forms to file your taxes, but many people now e-file due to the faster processing time. (Photo by Katie Jacewicz)

The 2012 tax season is here, which means it’s time to start compiling your W2, 1099 and other tax-related documents. See which deductions and credits carried over from last year, and how you can benefit from hiring a tax preparation service.

Comments

It is a great idea to have people reduce clutter by dispensing with old tax paperwork, but there are exceptions, including Forms 8606 (non-deductible IRA contributions). It may be important to have these forms from past years as a record to allow a portion of IRA withdrawals to be tax-free.

The new estate tax law for 2011 and 2012 will exclude the first $5 million dollars from being taxed.

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