Nearly 85 million taxpayers rely on professionals to complete and file their tax returns, according to the Internal Revenue Service (IRS). If you are one of them, preparing your receipts, forms, and financial documents ahead of time can save you a lot of stress when tax season arrives.
Your tax preparer may collect information directly from you or ask you to fill out a detailed questionnaire. Either way, being prepared helps make the process quicker and much more efficient. It also reduces the chance of missing important deductions or credits.
Even if you plan to handle your taxes on your own, early organization is just as important. Keeping your paperwork in order can help you stay focused, avoid last-minute rushing, and ensure your return is as accurate as possible. A little effort now leads to a smoother filing experience later.
8 Essential Steps to Complete Before Filing Your Taxes
1. Select the Right Tax Preparer
When you need a tax preparer, one of the most reliable ways to find a trustworthy professional is to ask friends, family, or trusted advisors for recommendations. It is important to make sure the person you choose holds a valid Preparer Tax Identification Number (PTIN), which confirms they are authorized to prepare federal income tax returns.
Take time to ask about their fee structure before making a decision. Costs often vary based on how complicated your tax situation is. It is a good idea to avoid any preparer or firm that charges a percentage of your refund. To help with your search, the IRS website offers helpful advice on selecting a preparer and includes a directory where you can search for qualified professionals by their credentials and location.
2. Book Your Appointment Early
Setting up a meeting with your preparer early gives you a head start on finishing your return, even if you choose to file for an extension. If you are expecting a refund, taking action sooner can help you receive it faster.
Waiting too long to book your appointment could cause you to miss the filing deadline. You might also lose valuable chances to lower your tax bill, like making deductible contributions to an individual retirement account (IRA) or a health savings account (HSA).
3. Organize Your Financial Documents
By the end of January, you should have received essential financial documents from employers, banks, brokerage firms, and any other businesses you work with. It is important to review each document carefully and make sure the information matches your personal records.
Several key forms to look out for include:
- Form W-2, which reports your earnings if you were employed
- Form 1099 series, used to report other types of income, such as dividends (Form 1099-DIV), interest (Form 1099-INT), and payments to independent contractors (Form 1099-MISC)
- Form 1099-B, which shows gains and losses from securities transactions; keep in mind that brokers often send this form in mid-February
- Form 1098, which details mortgage interest payments
- Form W-2G, which reports certain gambling winnings
Staying organized and checking every form against your own records helps avoid mistakes and ensures your financial information is accurate.
4. Gather All Necessary Receipts for Tax Filing
When preparing your taxes, it is important to organize your receipts based on whether you plan to itemize deductions or take the standard deduction. Choose the option that gives you the largest benefit, but the only way to know is by totaling your itemized deductions and comparing the sum with your standard deduction.
For the 2022 tax year, the standard deduction is $12,950 for single filers and $25,900 for married couples filing jointly. In 2023, these amounts rise to $13,850 for single filers and $27,700 for married couples filing jointly.
Search carefully for receipts covering medical expenses not reimbursed by insurance or a health plan like an FSA or HSA, property taxes, and investment-related expenses. These deductions have specific limits, but if your total is high enough, itemizing could work in your favor.
If you decide to itemize, gather any documentation supporting your charitable donations. Gifts of $250 or more require a written acknowledgment from the charity, confirming the amount given and stating that no significant goods or services were received in return. If you are missing an acknowledgment, reach out to the organization to request it. Additional details on claiming charitable deductions can be found in IRS Publication 1771.
Those with business income must also be ready to provide financial records. This includes bookkeeping systems like QuickBooks, receipts for business expenses, and related bank or credit card statements that support your entries on Schedule C.
5. Gather Essential Personal Details
While you likely have your own Social Security number memorized, it is just as important to collect the Social Security numbers for any dependents you plan to claim. Make sure to write these down and store them securely, along with any other personal information your tax professional might request.
If you own a vacation home or rental property, keep a record of those addresses as well. For properties you sold during the year, document the original purchase date, the sale date, the amount you paid, and the amount you earned from the sale.
6. Consider Requesting a Tax Filing Extension
When more time is needed to organize and complete your tax return, it is possible to request an extension until October 15th. Keep in mind that even with an extension, an estimated payment for any taxes owed must still be submitted by the standard April deadline. Meeting this requirement helps avoid unnecessary penalties and interest charges.
7. Prepare Early for How You Want Your Refund
If you are expecting a tax refund, it is important to decide early how you would like it managed.
You have the option to apply part or all of your refund toward next year’s taxes. This can be especially helpful if you regularly make estimated tax payments, as it may cover your first quarterly installment.
Another choice is to receive your refund as a paper check through the mail or as a direct deposit into your checking or savings account.
Some people choose to contribute their refund to special accounts such as IRAs, health savings accounts, or education savings accounts. You also have the option to purchase U.S. savings bonds through TreasuryDirect.
If you prefer, you can split your refund between different direct deposit accounts by completing Form 8888.
Make sure to tell your tax preparer how you would like your refund handled so they can include that information on your tax return.
8. Find a Copy of Last Year’s Return
Using last year’s tax return can make the filing process easier and help you avoid missing important details. If you are working with the same preparer, they likely already have a copy on file. If you are working with someone new, bringing your previous return can serve as a helpful guide for both you and your preparer. It highlights key information that might otherwise be overlooked. Here are two important areas to check:
Interest and Dividends: Reviewing last year’s return can show which banks, mutual funds, or other financial institutions issued you 1099 forms. Use that information to confirm you have received all necessary 1099s this year. If you closed accounts or sold investments, you might not receive a form from those institutions this time.
Charitable Contributions: Smaller donations may not have triggered formal receipts from organizations, but they are still eligible for deductions if you have proof like a canceled check or receipt. Check last year’s list of donations to remember which charities you supported and to ensure you are tracking similar contributions this year. It can also remind you to continue supporting the causes you care about.
When Is the Deadline for Filing a Tax Return?
For most taxpayers, the deadline to file a federal income tax return for the 2024 tax year is Tuesday, April 15, 2025. If you need more time, you can request an automatic six-month extension by submitting Form 4868 by April 15. This extension moves your filing deadline to October 15, 2025, but it does not extend the time to pay any taxes owed.
In certain situations, the IRS may extend the filing deadline beyond April 15. For example, taxpayers affected by federally declared disasters may receive automatic extensions. In 2025, residents of several states impacted by natural disasters have extended deadlines. For instance, victims of California wildfires have until October 15, 2025, to file their federal tax returns.
It’s important to note that while filing deadlines may be extended, the deadline to pay any taxes owed typically remains April 15. Failing to pay taxes by this date can result in penalties and interest, even if you have an extension to file your return.
Average Cost of Tax Preparation
The average cost of tax preparation in 2020 was around $220 for individuals who used the standard deduction. For those who chose to itemize deductions, the cost typically rose to about $323. These figures come from a survey conducted by the National Society of Accountants.
What Is the Process for Filing a Tax Extension With the IRS?
Each year, income tax returns are typically due around April 15. If meeting that deadline is not possible, it is easy to request an automatic six-month extension by submitting Form 4868.
It is important to remember that this extension only covers the filing of your tax return, not the payment of any taxes owed. To avoid extra charges like penalties and interest, all taxes must be paid by the standard due date, which is usually April 15. For example, for the 2022 tax year, the payment deadline was April 18, 2023.
Common Mistakes to Avoid When Filing Your Taxes
Overlooking Deductions and Credits That Could Lower Your Tax Bill
One of the most common mistakes taxpayers make is missing out on valuable deductions and credits. Even small deductions can add up to major savings over time. Many people forget about education-related credits, medical expenses, energy-efficient home improvements, or even job-related expenses that qualify. It is important to carefully review IRS guidelines and consult your tax preparer to make sure you are claiming everything you are eligible for. Some credits, such as the Earned Income Tax Credit (EITC) or the Child Tax Credit, have specific income and filing requirements. Failing to claim them could result in overpaying your taxes. Staying organized throughout the year and keeping detailed records can make a big difference when it is time to file.
Forgetting to Report All Sources of Income
Leaving out income, even by accident, can cause problems with your tax return and lead to penalties. It is important to report all sources of earnings, including freelance work, investments, interest, rental income, and even small side jobs. Financial institutions and employers typically send copies of tax forms, like 1099s and W-2s, directly to the IRS. If the information on your return does not match what the IRS receives, it could trigger an audit. To avoid missing anything, carefully review your records and check your mail and email for all financial documents before you file. Remember that even income without a formal tax form must be reported. Keeping a personal income log throughout the year can make this process much easier.
Filing Late Without Requesting an Extension
Missing the tax filing deadline without taking action can lead to unnecessary penalties and added interest charges. If you know you cannot submit your tax return on time, it is important to request an extension by filing Form 4868 before the regular deadline. An extension gives you until October 15 to complete your filing, but it does not extend the time to pay any taxes you owe. If payment is not made by the original April deadline, the IRS will assess penalties and interest on the outstanding balance. Filing late without an extension also increases the risk of missing opportunities for deductions or credits because of rushed preparation. Taking early steps to organize and, if needed, request an extension protects you from avoidable financial stress.
Conclusion
Preparing for tax season does not have to feel overwhelming when you take the right steps early. Whether you plan to work with a tax professional or handle your return on your own, organizing your financial records, understanding available deductions and credits, and planning for deadlines can make a major difference. Staying ahead helps you avoid costly mistakes, ensures you take advantage of potential savings, and reduces the last-minute stress that often comes with filing taxes. Filing early also gives you more control over managing any refund or outstanding balance. By following a clear and organized process, you set yourself up for a smoother, more accurate filing experience. Start gathering your documents now, stay informed, and give yourself the best chance at a successful tax season.
FAQs
What documents should I gather before filing my taxes?
Gather all income-related documents like W-2s, 1099 forms, and records of other income sources. Collect receipts for deductible expenses, mortgage interest statements, student loan interest forms, charitable donation records, and Social Security numbers for yourself and any dependents. Having everything ready makes filing much smoother.
When should I start preparing for tax season?
Start organizing your paperwork at the beginning of the year, as soon as you receive tax documents from employers, banks, and other institutions. Preparing early gives you time to spot missing forms, maximize deductions, and avoid last-minute stress that could lead to mistakes.
Should I hire a tax preparer or file taxes on my own?
If you have a simple financial situation, filing taxes yourself with trusted software can work well. If you own a business, have multiple income streams, or want to make sure you maximize deductions, working with a qualified tax preparer can save time and help you avoid costly errors.
What should I do if I cannot file my tax return on time?
Submit Form 4868 to request an automatic six-month extension if you need more time to file. Remember that the extension only applies to filing, not paying. You still need to estimate and pay any owed taxes by the original deadline to avoid penalties and interest.
What are the most common mistakes to avoid when preparing for tax filing?
Avoid mistakes like forgetting to report all income, missing eligible deductions and credits, filing late without an extension, or entering incorrect personal information. Staying organized, reviewing documents carefully, and starting early help prevent these issues and lead to a smoother tax filing process.
Recent Comments