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10 Tax Filing Tips to Help Organize Your Filing Process with the IRS

01/18/21 | Dana LaRieal Morales

Many of you probably didn't know but I was actually a customer service representative (CSR) for the Internal Revenue Service back in the day.  It was a great experience and made me realize the mistakes that people make on a regular basis as it relates to their personal income tax.  I decided it would be good for me to share some of the most common issues I used to and still do see (almost twenty years later), to help you avoid them. Now I know that many of you get anxious and itching to file your taxes in January because that is like an instant payday to you.  I mean I totally get it, but seriously people CALM DOWN!!!!  I promise you taking a little time and ensuring you have crossed the T's and dotted the I's can save you not only time but money and frustration. Ok now before I provide you with these tips I want to put out a disclaimer:  I am not a tax professional.  I am providing you information based on my own experiences as a CSR for those filing personal tax returns and want you to use your own judgment as to whether or not you should implement these tips in your own life. Alright, now that that's out of the way, let's get to it: 

1.  Don't File Too Fast

Many of you only worked at one place, so you get your W2 and you want to go ahead and file.  I say, "whoaaaaaa nelly"!!!  Do you really have all the documents you need to file?  You need to really think about what assets and liabilities you have and ensure you properly account for them in all the places on your tax form.  You'd hate to receive your refund and then have to pay back money or amend your return because you omitted something in error.  By law, all tax documents should be postmarked by Jan 31st...so at least wait until Feb 5th. to ensure you have what you need. 

2.  Avoid Anticipation Loans

Now, I don't want any of these companies trying to sue me for telling the truth here.  The truth is that by going to these places you are essentially taking out a loan on your own money!  Did you know by filing electronically you can get your money in as quick as 7 days?!?!  Why pay someone to do the same thing that you can do for free?  Just go directly to the source, file your taxes electronically...provide them with an account number and they will deposit your money into it directly.  If you want to get the status of your refund, you can go to the IRS website directly.

3.  Mind Who You Claim

If you have a person that may be claimable by someone else you need to ensure you can claim them before you put them on your taxes.  Just because they live with you during the year does not mean you can claim them.  It's based on five tests:  Relationship, age, residency, support and joint return and the answers aren't necessarily what you may think. Divorce decrees and/or written declarations can also change the rules. Chapter 3 of IRS Publication 17 details this out. If all else fails call and ask a CSR, but be honest in your responses so they can give you the real answer.  Claiming someone on your taxes that someone else should claim could delay your refund or cause you to owe money back.  This is also true if the actual person you are claiming files and claims themself.

4.  Get Help Preparing Your Taxes

For those who make $54,000 or less you can receive free help at a VITA site.  Those over the age of 60 can participate in the Tax Counseling for the elderly program and there are some things for a few other specific groups as well.  For everyone else don't be afraid to call 1-800-829-1040, the IRS helpline, to get assistance (after the government shutdown ends).  Also, use IRS Publication 17 to assist you in preparing your taxes.

5.  Use Free Online Filing Options

You should use the IRS Free File links to identify all available offers.  Many "other" sites have tricky extras that end up costing you when using their links.  Make sure you read and understand (especially the fine print) before clicking the button of sites outside of the list the IRS provides and even read those too.

6.  Appropriately Apply Deductions and Credits

There are many deductions and credits out there that people miss because they don't educate themselves. The online filing sites ask questions that help determine whether you are or aren't eligible for specific deductions and credits.  If you are using a preparer and the deduction or credit seems too good to be true, always ask for a detailed explanation of how they came up with it or what makes you eligible.  Every deduction and credit has an IRS Publication associated with it.  It doesn't take an extremely long time to review them...empower yourself! Additionally, you can review the latest changes to the IRS regulations here from the Taxpayer Advocates Office.  

7.  Get a Copy of IRS Publication 17

It explains most of the scenarios you will need to have covered.  If when reading it refers to another publication, just get it or download it from the website, they are all there.  This is a great place to start when researching changes in the tax code each year too.

8.  Keep Good Records

You always want to make sure you have records of anything you plan on claiming...or have a way of proving it if you are ever audited.  Most people have a general idea of what those things are so start keeping a running file of those items, be that electronic or physical.  If you know you will have a lot of receipts, have a way of categorizing them to make it easier come tax time. Just to note, everyone now files a Form 1040, (see recent changes).  Additionally, with the new tax law changes the standard deduction will probably be more beneficial for most people, but you never know until you crunch the numbers...so plan for it until you identify what is best for you.

9.  Know Tax Year Changes

We all experience life happenings, some of the biggest ones are caused by natural disasters, job loss, home loss and other national happenings.  Along with these changes comes changes to the tax rules, some good and some bad.  Please educate yourselves so you don't miss out or make a mistake when it comes to credits and deductions. (i.e., If you claim the Earned Income Tax Credit or Additional Child Tax Credit, the IRS cannot issue refunds before mid-February). Don't let this one scare you, you have the ability to do this on your own.  Again, most of the information you need to know is covered in Publication 17 or you can check out the Taxpayer Advocate Office's list of changes here.  One tip is to look for the green or red arrows to identify items you need to pay close attention to. The key is for you to be aware so you can ensure there isn't a credit, deduction or additional tax that you didn't have to pay in years past (marriage/divorce, birth/death, new home, etc.) or new ones that you do.  Don't leave money on the table.

10.  Don't Miss the Deadline

Whatever you do, do not miss the April 15th deadline if you owe!  File an extension, but don't just try to ignore it as though it's going to go away because it is not.  In fact, all that's going to happen is interest and penalties will continue to add up (these are calculated daily!).   If it is just a matter of you don't have the money, it's okay!!!  Just call and tell them you want to make an arrangement to pay.  They will set you up on a payment plan that works for your budget...no matter the amount.  I actually had to do this myself shortly after college when I was categorized as an Independent Contractor and didn't realize I had to pay my own taxes (I was young).  The letter I received from the IRS stated that I owed $20,000 and I of course went into a mass panic.  The key to this story is that I was able to make arrangements and pay it off.  It took me a while, but I did it...and you can too.

A Few Bonus Tax Tips

Ok, so after writing #10 above, I of course wanted to add a couple of bonus tips for all the side-hustlers and Entrepreneurs out there:

Bonus 1:  Know Small Business Requirements

Make sure you know what taxes you owe, both for your Federal and State taxes.  As a person who experienced the stress of owing the Government early in my life, you want to make sure you know and understand your requirements as a business owner, especially all of you who are independent contractors. If you don't pay quarterly taxes you need to ensure you are taking the appropriate taxes out of the money you make from every sell.  If not, you risk getting shocked at the end of the year.

Bonus 2:  Business Tax and Sale Log

Now for some small businesses you haven't made enough sells to justify purchasing an accounting software for your business.  You will hear people tell you that you must get an accountant, I say do what is best for your business. If you are diligent about keeping track of what is going in and out of your business, you can do it by hand without a problem, at least for a little while.  Of course, the more successful you are, the more complicated your in-take and out-take procedures and processes are and the riskier and more difficult it becomes.  By all means, when you can afford to make sure to add an accountant to your team whether full-time or part-time.

Bonus 3:  Know What You Are Filing

Even if you have your taxes prepared by someone else, you should always have a clear understanding and approve of what is being filed on your behalf.  You are ultimately responsible, whether someone else made the decision to do it or not.  By signing the last line on your physical and electronic return, you are certifying that you are taking the responsibility for everything on the document, so take it seriously.  Don't let someone rush you through the explanation of your taxes. If you are paying them, you are paying for their time...so use it.   

I hope you found these tips helpful!  Please let me know if you do by sharing, liking and/or commenting below, I'd love your feedback.


Dana is a Holistic Organizer, Certified Project Manager and Life Coach in Nashville, TN who works primarily with side-hustlers and solopreneurs to improve their work-life balance with organization and process. Connect with Dana for more organizing tips related to space, life, soul and business.