In our previous blog, we talked extensively about tax withholdings. In continuation of it, we will focus on things you can prepare and keep handy before the tax deadline closes by. Let’s take a look!
Collate essential documents and organize your tax records
It is always smart to keep an electronic or paper tax record system in place. The benefits are many, with the main being able to keep all critical documents in one place. Such documents include,
- Copies of last 3-years tax returns with all supporting documents.
- Copies of year-end forms like Form W-2 from employers, Forms 1099 from banks, and other payers.
- Records documenting transactions related to virtual currency.
- Copy of Form 1095 -A in case you claim a Premium Tax Credit.
- Collate all year-end income tax documents beforehand to avoid a delayed tax refund. If you file too early and miss to enclose an important document, then you would need to file an amended return, which will further delay your refund.
Other things to check include
- Confirm the mail and email address of all your employers, banks, or other payers. By doing so, you can check the year-end forms, which usually start coming by January for any corrections or errors. The mail or email IDs will come handy to inform any of the above-parties for amendments or updates if any.
- Notify the IRS in case of a change in address.
- Notify the Social Security Administrator in case change in legal name.
Check the validity of your Individual Taxpayer Identification Number
An Individual Taxpayer Identification Number (ITIN) is owned by all such taxpayers who do not own a Social Security Number (SSN). The ITIN is considered as your tax ID for filing your taxes.
You shall be extra conscious of renewing your ITIN to receive all your tax refunds on time. If you own an ITIN with the middle numbers 83, 84, 85, 86, or 87, then it’s expiration would be due this December. If your ITIN carries any of the middle numbers from 70 to 82, which has long expired in 2016, 2017, or 2018 respectively, can also be renewed to file your taxes.
Your ITIN might also be expired if you have not used it for the past three years for filing your federal income tax returns. So, please check the status beforehand and apply for renewal to avoid any future tax hiccups.
How to renew ITIN?
You can renew your ITIN by filling the Form W-7 (Application for IRS Individual Taxpayer Identification Number). Please ensure to enclose all necessary documents such as IDs and residence address proof for a quick process of your application. Usually, it takes around seven weeks to receive an ITIN assignment number from the IRS. In case of delay, it might take up to nine to eleven weeks for it to get processed. A delay in the renewal of your ITIN might result in a delayed tax refund or make you ineligible to file for tax credits.
File your taxes electronically
With the advances in technology, you don’t have to run around the IRS’s office to file your federal income tax returns. You can now file them electronically in a secure manner using many of the IRS online tools such as IRS Free File or Fillable Forms. Let’s take a look at all your e-filing options:-
- IRS Free file: You can use IRS Free File if your income falls below the threshold of $ 66,000 per annum.
- Fillable Forms: You can use the IRS Fillable Forms to file your 2019 tax returns if you earn more than $ 66,000 per annum.
Get your taxes prepared for free
If you earn less than $56,000 per annum, then you can visit your nearest Volunteer Income Tax Assistance site and get your taxes prepared for free.
If you’re age of 60 years or more and need help or guidance in preparing your 2019 tax returns, then you may consider visiting Tax Counseling for Elderly sites to get some free tax help.
Pace your tax refund by combining Direct Deposit with e-filing options
You can expedite the process of receiving your tax refunds by clubbing your e-filing options with IRS Direct Deposit. By doing this, you can receive your tax refund directly into your bank account. You can also choose the Direct Deposit option for tax refunds while filing on offline return.
The Bottom Line
There are so many things to prepare for having a seamless tax filing experience. Checking your withholding, keeping documents handy, exploring benefits of e-filing options are few of them. Preparing in advance can help you be ready and avoid last-moment tax surprises or hiccups. It is essential to be aware of the latest updates. A point in light could be the treatment of transactions related to virtual currency and their tax treatment. There is still enough time to catch pace and be ready for the 2019 tax filing deadline. You can contact your MyTaxFiler expert for having a comprehensive discussion on your 2019 taxes, and how you can prepare for them in advance, and explore ways to save big on them.