Monday, March 18

Do You Know These Tax Tips?


It's that time of the year again. Time to file your income taxes. Each year always brings changes. Being aware of the tips in this report may help you get that chore done more efficiently.

Filing deadline is April 15th. You have until April 18, 2016, to file your income tax return for 2015. If you request an extension, you will have until October 15th to file your return.

The IRS is no longer mailing tax packages. The continued growth in electronic filing helped the IRS to decide not to mail tax packages. If you need a paper form, you can download it from the IRS site or pick up the forms from a post office, library, or your local IRS office.

IRS2Go. This is a smartphone application that allows you to check the status of your tax refund. You can also get tax tips and other information. IRS2Go is free and is available for the iPhone and Android.

IRS on Social Media. On YouTube, the IRS has short videos on tax related topics in English, American Sign Language (ASL) and a variety of foreign languages. On Twitter, IRS tweets include tax-related announcements, news for tax professionals and hiring initiatives.

Electronic filing. For the last tax year, over 120 million taxpayers e-filed their individual tax returns. Were you one of them? The term e-file covers both preparing your return and sending it to the IRS electronically. When you e-file your return, your return is processed more quickly. The IRS typically processes an electronic return in less than 2 weeks. You'll receive your refund, if direct deposited, in about 10 days. Other advantages of e-filing are up-to-date forms and better accuracy. You can take advantage of e-filing in a variety of ways.

  • Use a tax professional to prepare and e-file your taxes. As of 2011, many paid tax preparers are required by law to e-file federal tax returns for individuals, trusts, and estates.
  • Use tax software to complete and e-file your return. You can use online tax software or load it onto your computer. Most tax software will walk you step-by-step through completing all the forms you need.
  • Use IRS Free File. This program is available only from the IRS site. If your AGI (adjusted gross income) is $62,000 or less, then you can use commercial online tax software provided by the companies of the Free File Alliance. This program also provides free fillable forms which are online versions of the paper forms. Check out this page on the IRS site for more information.

If you e-file, then you must sign the form electronically with your Self-Select PIN or Adjusted Gross Income from your previous year's tax return. This article from the IRS has more information.

One other tip, the federal-state e-file program lets taxpayers file their state returns at the same time as their federal return. This is available in most states and the District of Columbia.

Free tax return preparation. There are several programs available that offer free tax help for those who qualify. The IRS offers the Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs. This article from the IRS has more information.

Receiving your tax refund. Are you one of the millions who receives your tax refund by direct deposit? With direct deposit, you'll receive your refund faster than with a paper check. It also prevents your check from being lost or stolen or returned to the IRS as undeliverable. Did you know you can split your refund into multiple checking or savings accounts? Or buy savings bonds? To allocate your refund to more than one account or purchase savings bonds, fill out and include Form 8888 with your return. This article has more about these direct deposit options.

Tax Changes. There are typically tax changes every year. The latest news from the IRS can be found on their home page.

Filing one's taxes is never fun, but these tips should make the job a little easier. If you're expecting a refund, be sure to check out the great savings options at your financial institution. Tax refunds are a great way to begin that emergency savings fund, education fund or perhaps a new car or first house fund. Whatever your savings goal, going direct deposit with your financial institution, makes getting started a breeze!