Top Tax Tips for 2012

“In this world nothing can be said to be certain, except death and taxes.” The works of Benjamin Franklin, 1817). It’s time to pay Uncle Sam and many people hate it and for a worthy cause. Taxes cause nightmares to many people but it does not have to be so. The following top tips should help make filling returns a lot easier:

Do things on time.

Don’t wait until the last minute to file your returns. Pay your taxes on time. If you realize that you can’t finish your return on time file Form 4868 by April 16. It gives you a six month extension.

Keep your records.

Failure to keep records can make you pay more than what you are supposed to pay. Have some files where you file your receipts and other documents like the mortgage interest statements. When you receive your 1099K and W-2, do not throw them away, file them in your tax file. It’s good to have a tax file where you file your tax documents. Have a tax checklist on hand to guide you in recording and filing tax information. Make sure you file information about your investments, the related income and your rental income.

Decide who is going to do your returns

If you are a busy person, doing your taxes maybe too much, get someone to do it for a small fee. If you are going to do it yourself, make sure you are doing the right thing.

Know the credits you can claim and the deductions you are allowed.

Knowing what you qualify for will help you when you file your return. It will also make tax preparation better for you in the coming years.

Remember to provide dependent taxpayers’ IDs on your return.

Failure to do so will result in IRS denying you the $3700 exemption for dependents and the $1000 child tax credit for your children who are under the age of 17. If you are divorced make sure that only one of you is claiming these credits. Make sure all your children have social security numbers in advance.

File electronically

Electronic returns are processed faster and if you have a refund you will get it faster. IRS also acknowledges receipt when you file electronically.

Get help

If you don’t understand something, get help. The IRS website provides publication 17 to guide you.

Pay your taxes in 2012

If the guys in Congress don’t intervene, taxes will increase next year for those in the highest tax bracket. You will be better off if you paid your taxes this year to take advantage of the lower rates.

Claim your home office deduction

A lot of people are wary of claiming this deduction as it is said to result in IRS audits. If you have nothing to hide, why not claim it, if you know you legitimately deserve it. You can calculate the home office costs by using the ratio of the office area to the area of the whole house.

Fund your retirement contribution for 2011.

If you have not funded your traditional retirement contribution for 2011, do it before April 17. Making contributions will help lower your tax bill this year.

Remember miscellaneous expenses

If your expenses are above the limit remember miscellaneous expenses are deductible if the combined amount is not more than the 2% of your adjusted gross income.

Check or review your return

Check your return and check it again. If possible get someone to help you.