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Let’s start with the obvious items on any tax prep checklist.
Gather all the documents that confirm the money you received during the previous year.
Deductions help reduce your taxable income, which generally means a lower tax bill.The key to claiming deductions is documentation — not only can it protect you if you’re ever audited, it can cut your tax bill by helping you remember what to claim. Gathering those records may take time, but it can pay off, says Norm Blatner, a CPA at Blatner & Mineo in Buffalo, New York.“So let’s say, you know, $150, $200 more [is] in your tax refund. Was it worth spending an hour or two to get an extra $150, $200?” he asks.You don’t have to itemize to benefit from some deductions. These are listed directly on Form 1040. More deductions are available if you itemize expenses on Schedule A.Here’s a rundown of some popular tax deductions. Make sure you have documentation for each before you file:
Note that state income taxes paid should be on your W-2, but remember to add any state estimated taxes you paid during the year.
Next on the tax prep checklist are credits, which are deductions’ more valuable cousins: They provide dollar-for-dollar cuts in any tax you owe. But as with deductions, you need documentation to claim them. Here are some popular tax credits:
Most of us have income taxes withheld from our paychecks to cover our tax liabilities; that amount is on our W-2 forms. But if you made federal estimated tax payments during the year, have this amount handy, too.This tax prep checklist covers preparation issues common to most filers, but taxes are different for each of us. Be prepared to tailor the tax prep checklist to your situation