Many people who are expecting a tax refund from Uncle Sam have already filed their tax return. If that’s you — splendid, well done, bravo!
Not everyone has checked that off the to-do list, however.
This time of year, Edward Leahy, a volunteer tax preparer with Family Housing Advisory Services, sees a lot of folks who think they’re going to owe the government and wait to file on or right before the April 15 deadline, thinking it gives them time to get their payment together.
“It’s actually better to file your tax return now, and then figure out how to pay the amount owing because your tax bill isn’t due until April 15,” said Leahy, director of the Earned Income Tax Coalition in Omaha. If you wait until the last minute to file, he cautioned, it gives you less time to figure out how to pay.
And now is a good time to visit a volunteer tax preparation center, Leahy said. “March is a little bit of a lull, so wait times are not that long.”
Taxpayers with an annual gross income of $52,000 or less and military members (no income limitations) are eligible for free tax preparation services at any of these Omaha centers: Family Housing Advisory Services, 3605 Q St.; Eastern Nebraska Community Action Program, 2406 Fowler Ave.; Metropolitan Community College, Fort Omaha Campus, 30th and Fort Streets, Building 10, Room 122; Goodwill Industries, 4805 N. 72nd St. By appointment only: Latino Center of the Midlands, 4821 S. 24th St. For an appointment, call 402-733-2720.
Most Omaha-Council Bluffs area residents who earn $58,000 or less also can prepare their own taxes using an online program at MyFreeTaxes.com/uwmomaha.
Whether you’ve filed your taxes, plan to see a tax preparer or want be better prepared for next year’s tax season (sorry, it never ends), Leahy offers these tips.
Gather all the documents
Many individuals who own a business or earn investment income are just now starting their tax returns because some of the necessary Internal Revenue Service forms did not appear until late February, Leahy said. Before you file:
>> Make sure you have all your W-2s. Even if you worked only a month for one employer, you need a final pay stub or a W-2.
>> Review your documents for accuracy. If you bought or sold stocks in 2013, make sure you have documentation that states the original price of the shares.
>> Gather up all your receipts for business expenses such as mileage, office supplies or tools — anything that’s not reimbursed by your employer or, if you’re self-employed, receipts for any purchases that were integral to your business.
>> If you’re visiting a tax preparer, remember to bring your checking and savings account information so they get your refund deposited directly into your bank account. Make sure you know your Social Security number and your children’s as well as their birth dates.
If you itemize:
>> Get printouts from the pharmacy or drugstore documenting your medical expenses.
>> Gather up receipts for charitable giving.
>> Know what type of IRA you have. The traditional IRA and Roth IRA are treated differently.
>> Individuals can make an IRA contribution until April 15 of this year that can count toward tax year 2013, Leahy said. Same goes for health savings accounts. Individuals can contribute to a health savings account until April 15 of this year and have it count toward a tax year 2013 claim.
Check eligibility for the Earned Income Tax Credit
Low- and moderate-income workers, self-employed people and farmers who earn less than $51,567 may be eligible for the Earned Income Tax Credit. The website IRS.gov has an assistant to calculate if you should claim it. Eligibility typically is based on age, earnings and family composition.
Since 2009, the IRS has required divorced or separated parents to file Form 8332 depending on which parent, custodial or noncustodial, claims that year’s earned income tax credit.
Prepare for next year
If you’ve already filed your tax return, you may want to start thinking about next year’s. Follow these few steps and you’ll be patting yourself on the back next year:
>> Recalculate your withholding. This is a good step if you anticipate getting married or having a child this year. Go to IRS.gov with your most recent pay stub in hand, and type in “withholding calculator” or go to IRS.gov/Individuals/IRS-Withholding-Calculator.
>> Instead of shoving all your receipts in a drawer, create a simple envelope filing system. “I put all my medical bills in one envelope and all my charity slips in another,” Leahy said. Your best bet? Label a couple of large envelopes for receipts and other documents and keep them in one place.
>> Keep track of all transactions. Check that year-end statements are accurate and complete.
>> Everyone wants to file early, but don’t file until you have all your tax documents for the year.
“The last thing you want to do is have to file an amended return,” Leahy said. It can draw the attention of the IRS, and you can find yourself being audited. “Wait until you have all your tax documents for the year.”
>> Some events you can’t plan for. If there’s a death in the family, make sure you have the death certificate available when you file next year. If there’s a will and you’re the executor, make sure to bring the paperwork documenting that to a tax preparer.
Note for the self-employed
>> The self-employed can sometimes experience a wide variation in income over the course of a year. The best strategy for the self-proprietor is to make quarterly estimated tax payments. “It’s a lot easier paying $250 a quarter than trying to come up with $1,000 all at once,” Leahy said.
To learn more
>> The Family Housing Advisory Services Inc., 2401 Lake St., offers monthly financial education workshops. For coming workshops, go to: fhasinc.org and click on “Financial Management Workshop.” The workshop is free, and the workshop manual is $15. Topics covered include: “How to maximize your tax refund,” “Identity theft,” “How credit affects your life” and “Investing.”