Tax Preparation???

• What do I need? • Where do I go?

Get OrganizedKeep a folder with all your important financial info!

• The IRS is all about documentation. By late January or early February, you should receive a W-2 from each workplace where you received a salary. This form details how much you made, along with how much federal and state income tax and Social Security and Medicare payroll taxes were withheld.

• If you worked as an independent contractor, you'll get a 1099-MISC from each job. This statement lists only your earnings. No taxes were withheld, meaning you'll need to figure your income taxes that are due, as well as any possible self-employment tax. If you work and get paid in cash you will also need to pay taxes on your earnings.

• In addition to the earnings statements, your tax folder should be home to other types of tax forms you receive. These include statements of additional income, such as interest or other investment earnings, as well as documents useful in claiming tax breaks, such as deductible student loan interest listed on Form 1098-E or records of contributions to an IRA or charitable donations you’ve made.

• And don't even think about ignoring the tax statements. In most instances, the IRS also gets copies of these tax-related earnings and payments. These amounts are the first things the IRS checks when it begins processing your return.

• Also be sure to have your social security number and picture ID.

Talk to Your

Parents• If you are a student looking to file your first tax return, stop. Talk with your

parents first. Mom and Dad may be planning to list you as a dependent or claim some of your college costs on their return. Such claim conflicts are common in families where college kids work enough to be required to file a Form 1040.

• If your parents are claiming you as a dependent then you cannot claim yourself.

• To avoid creating filing problems for your folks or yourself, look at each of your tax situations and determine the tax-smart way for each of you to file. Chances are your parents could benefit most for these education tax breaks, and if they're helping you pay for college, it would be nice if you let them get first dibs.

Decide How to File

• To protect yourself from tax scams, avoid tax preparers who base their fees on how large of a refund they can get for you.

• Also good to avoid places that offer to give you a refund PRIOR to actually getting the refund from the government because they will keep a big chunk of the money you should be getting back.

• Are you going to use Turbo Tax or some other sort of do it yourself software?• Are you going to go to an Accountant?• H & R Block• Jackson Hewitt• Liberty Tax• If cost is a concern, you might be able to file for free through the Free File program. This

partnership between the IRS and more than a dozen tax software companies is open to taxpayers who make less than a certain amount. The earnings limit for the 2015 filing season that begins on Jan. 20 has been bumped up a bit for inflation to $60,000. Here is the website for Free File http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

Don’t Leave Money on the TableYou can reduce your tax burden in several ways – here are some things to think about

• State and local sales taxes. The IRS allows you to deduct these by using figures based on your income and geographic location, or you can use your own receipts if you have the records.

• Charitable contributions paid through payroll deductions. Employees may retain pay stubs as proof.• Child and dependent care credit. You may be able to claim this credit if you paid a provider to care for

a dependent while you worked or hunted for a job.• Job search expenses. The IRS allows deductions for costs such as travel and resume printing.• Earned income tax credit. Families with lower incomes that qualify can claim this credit.• Workplace benefits also can help save on taxes, says Wendy Weaver, a Certified Financial Planner at FBB

Capital Partners in Bethesda, Maryland. She recommends workers contribute to their company 401(k) or other retirement plan where employee contributions are made on a pretax basis and the money grows tax-deferred. Similar tax-saving, employer-provided benefits include health savings accounts or flexible spending accounts.

Don’t Procrastinate

• Don’t be nervous about filing your taxes! Give yourself enough time to get all your paperwork in order and then set up a time to go see your tax preparer. mid-March is a great time. You don’t

• Leave ample time before the April 15 deadline in case you run into issues, have questions or have trouble getting an appointment with a tax preparer,”

Sources of Information

• Bell, Kay. "6 Tips on Filing Taxes for the First Time." Bankrate.com. Web. 28 July 2015.