The new year has officially begun and everyone knows what that means, right? It’s time to start thinking about preparing for tax season again. Start organizing your documents now and you’ll have a smooth filing experience.Here are some valuable tips for approaching your taxes in 2015:
- Access information: When you file your taxes, you’ll need to know the Social Security numbers of you, your spouse and your dependents. Be sure you have access to this information so you won’t have to do any scrambling at the last minute.
- Consider deductions: Take some time to think about what you’ve spent over the course of the year, because you could save money through deductions you didn’t even know were available. For example, did you have medical expenses or education costs? Collect proof of payment in one place so you can easily itemize your deductions and credits when the time comes.
- Create folders: File folders can be a huge help when you’re getting your financial statements organized. Most documents will be sent to you by Jan. 31, and keeping them all in one place will save you a great deal of time and stress.
- Make a checklist: Write down a list of everything you need to do before you’re fully prepared to file your taxes this year. If you’re not sure where to begin, try using this helpful TurboTax checklist. It makes a note of all the forms and details you’ll need to collect before sitting down to file. The list is organized with the most commonly needed items first so you can easily cross off anything that doesn’t apply to you or your family.
Security is also an important factor to keep in mind when preparing for the upcoming tax season. There are several types of identity theft, and tax fraud is a serious one that affected 1.6 million taxpayers in the first half of 2013. One of the most common methods of tax-related identity theft is for criminals to file fraudulent tax returns using someone else’s identifying information.
“What the identity thieves do is play on volume,” said US Assistant Attorney General for the tax division, Kathryn Kaneally, to the Boston Globe. “So if they file 10 returns and 9 are stopped, the 10th one went through and they got the money.”
Here are some tips to help protect your identity during tax season:
- Be careful with identifying documents: Keep all of your family’s Social Security cards, passports and other identifying documents in a safe. Don’t carry them on your person unless absolutely necessary, and never write down Social Security numbers.
- Don’t give out information: Personal data should never be communicated over the phone or through email unless you personally made first contact with a legitimate government agency. Cyber-criminals can convincingly pose as the IRS online and over the phone, so be wary of anyone contacting you and asking for identifying information or secure documents. You should also refrain from giving businesses your Social Security number or Individual Taxpayer Identification Number just because they ask for it.
- Keep your files locked up: Once you’ve organized all of your tax-related information, keep them locked up in a safe. This way, thieves won’t be able to use this information against you should they gain access to your home.
- Stay alert: If you receive a notice from the IRS that more than one return was filed in your name, that you have a balance due or that an income change has been reported for you, then it’s important to contact the IRS immediately as these are signs that you may be a victim of tax fraud.
Be safe this tax season, and if you’re concerned with the state of your security then you may want to consider registering for identity protection services that can alert you to certain activities that may indicate fraud.