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Fast Tax Refund
Faster Tax Refunds In Just A Few Easy Steps!
The quicker you get your tax refund back from the goverment, the better for you, so begin now.
- Lets Begin!
The first step is the most difficult. Stop thinking about it and get started. Unless you actually begin your tax return, you'll never
finish it.
Maybe you don't have all of your information yet, if this is the case just put your name and address on your forms. Doing this will get
you in the right mindset to move forward with your return. Your first step is to simply get started.
- Gather all of your information.
Come the end of January, be certain you've received W-2s and any other statements from your banks and brokers. You'll receive 1099 Forms
for dividends, interest, and any sales of stock. Your bank that holds your mortgage will issue you a Form 1098 for interest and real estate
taxes paid. Get this information together and review it! They're not always accurate, make sure your information is correct.
- Categorize the numbers.
You'll need to have totals for your income and deductions. You'll need that total "number" if you're filing your own tax return,
whether by pen and paper or electronically on your computer. If you're having a third party prepare your return for a
tax refund, you'll need to provide these numbers to them.
An excellent way to get organized is to use an envelope system. Setup an envelope for each of the income and deduction categories.
You'll have an envelope for charitable contributions, medical expenses, interest paid, job expenses, etc. Find all of your receipts,
checks, and invoices, then put them in their appropriate envelopes.
This is a simple system that you can use all year around. Place all of your receipts into a file or box. When you balance your
checking account, on a monthly basis, you seperate the checks and receipts according to their categories. This will help you be much
more organized for next year.
When tax time rolls around, you should have all your receipts and checks seperated into envelopes by category.
Simply add up the receipts and checks, and that's the total you use on your return or provide your preparer.
This way you know how much you've spent in each category. And, with a system like this, you should never have to worry about an audit.
An audit is simply the IRS asking you to prove the information you've provided to them on your return. You already have that. Just
gather the information you've organized and hand it over. After they see you're organized and that everything matches, it will most
likely be a quick audit.
- Review the numbers.
Sometimes, the information you have is going to be wrong.
On the income side, you must report any and all interest and dividends you've received, even if you didn't receive a 1099.
You'll need to have a cost basis and match up the sale of stock with the cost. The number shown on your 1099 B is
only the price you sold for. You don't pay tax on that number. You reduce it, on a Schedule D of your return, by the cost,
including fees. You only pay tax on the net profit.
If you don't sell all of your position, you'll have to allocate your costs on a per share basis.
On the deduction side, you could have deductions not shown by the raw data. For example, if you made your January mortgage payment
on December 31, of the previous year, the interest you paid won't be shown on the Form 1098 sent by your lender. That's because they
didn't receive your check until after the 1st of the year.
But it's a valid deduction, and you should check an amortization schedule
to calculate the additional interest. The additional interest would show on line 11 of your Schedule A.
- Talk to your accountant.
If you're having your return professionally prepared, call now for your appointment.
Just be certain you've got your information in order when you arrive. It will likely cost you less in the long run.
- Put pencil to paper.
Or, at the least open the tax preparation software on your computer. You've got all of your numbers. If you're going to prepare
your own return, put pencil to paper. Find a place without distraction and actually do your return.
You've already done the hard work. Now all thats left to do is put the numbers on paper and add them up. This is really the easier part.
- Get your return to the post office.
A finished return sitting on your desk that calls for a refund does no good until you mail it. It's your money. Don't allow the
goverment an interest free loan. It's enough that they've used your money all year without paying any interest. Don't add insult to
injury by putting off mailing your return.
If you want a faster return you should e-file. This a cost savings for the goverment and in turn taxpayers. It will expedite your refund.
Electing to have your refund direct deposited will always get it into your hands faster than waiting for the postal service. More people
are electing for direct deposit every year.
Completing lines 70(b), (c), and (d) on your Form 1040, and filing an electronic return, in theory could have your refund in
your account in as few as 24 hours.
Also, the IRS now has a new refund assistance hotline, (800) 829-1954. There is also a new Web tool called "Where's My Refund?"
that can tell you what the status of your return is.
For more tax tips and access to preparation and filing tools,
visit www.moneycentral.msn.com.
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