According to the Government Accountability Office, an estimated 2 million taxpayers each year overpay their taxes by failing to take all their entitled deductions.* If your tax records are disorganized, you could be missing out on ways to save on your tax bill.
In addition to helping you save money, getting your records organized can make tax filing quicker and easier. Just follow these steps:
Step 1. Label three folders. Can’t be easier, right? Just label one folder “income,” one “investments” and another “expenses and deductions.”
Step 2. Start sorting. Go through your pile of receipts and documents. Put everything that shows earnings (W-2 forms from your employer, dividend and interest statements from deposit accounts, tip statements, etc.) into your income folder.
Investment statements showing interest, dividends and investment purchases and sales, as well as information about capital gains and losses, should go in the investments folder.
Put receipts for charitable donations, unreimbursed medical expenses, mortgage interest statements, property tax statements and any other deductible expenses in your expenses and deductions folder. Not sure if it’s deductible? Visit www.irs.gov and search for Tax Topic 500 for more information on deductible expenses.
If you work from home, you may be eligible to deduct home office expenses. In that case, include copies of utility, phone and Internet service provider bills, as well as household repair bills and rent or mortgage payments. To learn more, download Publication 587, Business Use of Your Home, at www.irs.gov.
Tip: If you place receipts and documents in their corresponding folders as you receive them throughout the year, rather than waiting until tax season, you’ll save time.
Step 3. Compile any other information you will need to file your return, including:
- Social Security number
- Account number(s) for directly depositing your refund
- Previous year’s tax return
- Password if using online tax preparation software
E-File for Quicker Refunds
Once you have your information compiled, e-filing can help you complete your return, avoid common errors and get your refund faster, especially if you choose direct deposit. To learn more and find out if you are eligible for free e-filing, visit www.irs.gov/efile.
- * Source: Government Accountability Office, www.gao.gov
- Website not belonging to this organization is provided for information only. No endorsement is implied.
SPEED UP YOUR REFUND WITH DIRECT DEPOSIT
According to the IRS, taxpayers who use e-filing and direct deposit may receive their refunds as quickly as 10 days after filing. You can choose to have your refund directed to a maximum of three financial accounts. For direct deposit to your Navigator Credit Union account, please provide our routing number 265377950 and your 13-digit account number.