February 25, 2011 > Tax Season is Here: Are you Ready?
Tax Season is Here: Are you Ready?
By Alan L. Olsen, CPA, MBA (tax), Managing Partner, Greenstein Rogoff Olsen & Co. LLP
Tax season is here and the deadline for filing your tax returns is nearing. If you are not sure where to start, these five steps may help as you prepare to send your tax returns to the IRS and state authorities.
1. Get Organized
You should review all financial activities throughout the year and collect any applicable documents that you will need to file your tax returns. Consider if you have sold stock, purchased online products without paying tax, re-located due to a change in employment, etc. These are all items that you will need to record on your tax return.
As the W-2s and 1099s start coming in, store them in a file with the rest of your tax documents. Organization is a key component to making tax filing less stressful.
If you have your own business, organize all your receipts and expense journal from the previous year.
2. Prepare Your Tax Returns
After you have organized all of your tax documents and financial information from the previous year, you are ready to prepare your tax returns. Consider your options: You can prepare the tax returns yourself using tax software, or you can hire a paid preparer. IRS Statistics showed that last year, over 34 million e-filed tax returns were self-prepared. Be aware that self-prepared returns have an increased chance for error. If using a tax preparer, make sure they have all your tax documents early, otherwise, you may have to file an extension.
3. Did you take all of your deductions and credits?
To maximize your refund, review all of the credits and deductions that you can take. A CPA can help you learn more about deductions/credits that you are eligible for, but consider some of the following:
* First-Time Homebuyer Credit
* Child Tax Credit
* Earned Income Credit
* American Opportunity Credit
* Educator Expense Deduction
4. Double Check your Return
Are you ready to submit your tax return? Carefully review your tax return to ensure that there aren't any mistakes that will delay your refund.
* Did you sign and date your tax return?
* Do you have the correct social security number on your tax return?
* Is your filing status correct?
* Did you use the correct forms/schedules?
* Did you claim eligible dependents?
* Did you report all of your income even if it is not on a W-2 or 1099?
* Do you need to pay and/or report payroll tax?
5. File Your Tax Return
As you prepare to submit your tax return to the IRS, consider your options. You can e-file or paper file your tax return. The turn-a-round time for refunds is much quicker with e-filing, but the IRS still accepts paper-filed returns.
Alan Olsen is Managing Partner at Greenstein, Rogoff, Olsen & Co., LLP, a leading CPA firm in the San Francisco Bay Area. With more than 25 years of experience in public accounting, works with some he of the most successful venture capitalists in the world, developing innovative financial strategies for individuals and businesses. For more information on filing your tax return this year, contact us at 866-CPA-2006 or at www.groco.com.