The new tax season is approaching fast. Are you ready to prepare your list of tax deductibles for this year? Preparing for tax returns does not have to be painful if you stay organized. If you file a simplified return you can do it yourself and even online for free federal returns. Even if you have never filled out your own forms many tax return software and forms come with a how to fill out your forms help page that even give you a list of credits that are available.
One of the things you'll need to know is if you want to use itemized deductions or the standard deduction when filing your tax return. The standard deduction works best if you did not have any business expenses or the standard amount is more than what your itemizing deduction would have been. Remember also that interest paid on a student loan can be deducted as a tax deduction and can be found on the form 1040 line usually on the front page.
If you travel for your job you should keep a 12 month expiration worksheet of all expenses such as gas or mileage, hotel stays, meals, tips, clothing, entertainment, etc as they are deductible. Do not forget personal property discounts either such as the cost of your vehicles plates and tags. If you pay for child care while you work or look for work it is deductible under the child care tax credit. and that certain education expenses for children are also deductible. Tuition for a spouse or child in college or a voluntary school who has the federal student loan program in place can earn you a credit.
A retirement savings plan like a 401K can be set up at the convenience of your employer usually after you have been on your job for a year. If you do not have a retirement plan in place you can start an IRA with your tax return and every year have a territory or all of it added to your account to save for your future. Saving for retirement can also save you from paying higher taxes if you save your money in a traditional IRA or a Roth IRA depending on your individual needs.
Just remember when you think of taxes that taxes are what you pay and credits are what you receive. So a child care tax is something you pay but can be deducted just like real estate taxes you pay on your home, personal property taxes you pay for plates and tags on your vehicles, mortgage interest paid to a financial institution or a even estate taxes. Preparing your taxes does not have to be a hardship if you keep your items organized by receptions with a little planning.