If you want to get your 2011 taxes in early and get your refund quickly, here are some tips to getting those dollars in your pocket ASAP.
1. Accumulate the data
By the second week of February, you should have all the numbers in hand. Make sure you've gotten W-2s. You'll receive 1099 forms for any interest, dividends and stock sales. Your mortgage company will send you a Form 1098 for any interest and real-estate taxes paid. They're not always right. They won't include any interest you paid at the very end of December because the creditor won't have received the money until 2012.
In December 2010, Congress extended a number of tax breaks for 2011, including the sales-tax deduction, a $250 deduction for classroom expenses and deductions for mortgage insurance premiums and college tuition expenses. And don't forget about other 2011 tax breaks, including credits for energy improvements, adoption credits and credits for college education costs.
2. Analyze the numbers
Sometimes, the raw numbers you have are going to be wrong. Review your documents carefully.Money-saving tax tips for 2011 returns You'll have to match up the sales of stock with the cost of those shares. The number shown by your broker on Form 1099-B last year was only the sale price. You're not taxed on 100% of that number. You reduce it, on Schedule D of your return, by your cost, including broker's fees.
3. Call your accountant
If you're going to have your return professionally prepared, call your accountant now for an appointment. It is important to get on your accountant’s calendar ASAP.
Make sure you've got the numbers in order when you show up.
4. Put ink to paper
If you're doing your own return, put ink to paper or open your tax software and begin inputting. If you are preparing your own tax return, no matter how sophisticated the software program, remember that garbage in equals garbage out. I have seen numerous “do-it-yourself” tax filers come to me w/ prior year returns that were missing deductions or tax credits which costs the taxpayer.
If you are not familiar with the changing tax code and the deductions you are entitled to, then spend a few dollars and hire a CPA. Remember, the IRS will not tell you of eligible deductions or credits for which they have no documentation of. Don’t be penny wise yet pound foolish.
5. Mail your return
Mail your return as soon as you have completed it, reviewed it and signed it. Of course, the best way to speed up your return is to e-file. Elect to have your refund directly deposited into your bank account. This will always get it into your hands faster than snail mail.
The earlier you file, the quicker you will receive your refund.
Robert F. Joyce is a certified public accountant and financial planner in Yorktown Heights, NY. Robert specializes in tax preparation and planning, bookkeeping services and financial planning for individuals, businesses, estates and trusts.
