As we near the dreaded April 15th, there are many people who have still yet to tackle their taxes. As Charles Schwab published earlier this month, "There's no question that preparing your tax return can be a daunting challenge. And the more complex your finances, the more complex your tax return."
CFP President, Carrie Schwab-Pomerantz points out six essential tips for preparing for tax day.
1. Have identification number handy
This can include key pieces of information such as birthdays and social security or tax ID numbers for yourself as well as any/all dependents and co-filers.2. Collect documents that show earnings
Depending on your income type, you may need to gather several different kinds of forms.- Regular employment = W-2 form from employer
- Income from interest, dividends, capital gains, freelance work or Social Security = 1099 form (copy sent to the IRS by the issuing institution)
- Self-employment or alimony = no specific form but you'll need either bank statements or personal records
You should have received these forms in January or February so be sure to follow-up if anything has not arrived. Remember that just because you did not receive a form, you must still include all income on your tax return.
