Financial Tip of the Week from the Iowa Bankers Association:
By now, you've probably noticed important tax documents arriving in the mail and tax-preparer kiosks set up at your local shopping centers. This can only mean one thing: Tax season is just around the corner.
Even though your return is not due until April, getting an early start will make filing easier. Here are the Internal Revenue Service's (IRS) top 10 tips that will help your filing process run smoother than ever this year.
1. Start gathering your records. Round up any documents or forms you'll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you're claiming on your return.
2. Be on the lookout. W-2s and 1099s will be coming soon if they haven't arrived already; you'll need these to file your tax return.
3. Use Free File. Everyone can find an option to prepare their federal tax return and e-file it for free. Visit www.irs.gov/freefile to review your options.
4. Try IRS e-file. After 21 years, IRS e-file has become the safe, easy and most common way to file a tax return. Last year, 70 percent of taxpayers—99 million people—used IRS e-file. Starting in 2011, many tax preparers will be required to use e-file and will explain your filing options to you. This is your chance to give it a try. IRS e-file is approaching 1 billion returns processed safely and securely. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, combine e-file with direct deposit and you get your refund in as few as 10 days.
5. Consider other filing options. There are many different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at an IRS office or volunteer site. Give yourself time to weigh all the different options and find the one that best suits your needs.
6. Consider direct deposit. If you elect to have your refund directly deposited into your bank account, you'll receive it faster than waiting for a paper check.
7. Visit the IRS website. The official IRS website (www.irs.gov) is a great place to find everything you'll need to file your tax return: forms, publications, tips, answers to frequently asked questions and updates on tax law changes.
8. Remember this number: 17. Check out IRS Publication 17, Your Federal Income Tax on the IRS website. It's a comprehensive collection of information for taxpayers highlighting everything you'll need to know when filing your return.
9. Review! Review! Review! Don't rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return, as these are the most common errors made by taxpayers.
10. Don't panic! If you run into a problem, remember the IRS is available to help. Visit www.irs.gov or call toll-free (800) 829-1040.
These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. The IBA serves it members by providing legislative advocacy, training, regulatory compliance and other services designed to enhance the ability of banks to serve their communities. Learn more at www.iowabankers.com.