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It's that time of year again

Americans across the country have begun the yearly ritual of scrounging through their file cabinets, glove compartments, wallets and envelopes tucked around their home and office looking for potential receipts as they prepare to begin filling out their federal taxes. April 15th is traditionally the day taxes must be filed unless an extension has been requested. This year, the tax due date has been extended to April 18th, a result of a Washington DC holiday known as Emancipation Day, a day to recognize the freeing of slaves in the District of Columbia.

Gathering your financial information can be a daunting task. Taxpayers will need to collect receipts and canceled checks as necessary backup for any income or deductions that will be claimed on the tax returns. W-2s must be handed to an employee or mailed by January 31 of each year. For those people who are independent contractors, February 1 is the deadline for 1099 forms to be mailed.
Taxpayers should keep records of any travel done for company business, including hotels, airfare and car rental expenses. Keep track of any medical expenses for any possible deductions. If you were laid off from work and were actively seeking employment, gather those receipts related to travel expenses and mileage as they may be deductible. Parents should also keep track of childcare expenses as they may possibly be considered as a deduction. Some long-term healthcare premiums qualify as a deduction. In order for a taxpayer to claim any medical expenses, including healthcare or insurance premiums, these expenses must exceed 7.5 percent of the taxpayer’s adjusted gross income.
For independent contractors, the list of possible deductions is vast. Mileage, telephone, cell phones, internet service, health insurance payments as well as costs associated with business meals are among some of the possible deductions that can be taken. Local H&R Block agent Celeste Dunn stressed the importance of keeping good records for those tax payers who are self-employed. “It is crucial that they have some kind of documentation or records as proof of income,” said Dunn. She added that taxpayers should keep a detailed log of dates and mileage for any travel associated with business. H&R Block also offers a review of 2009 tax returns. “We are doing second looks on last year’s taxes for free starting February 15th,” said Dunn. According to Dunn, for those taxpayers who have received unemployment benefits they need to remember that unemployment benefit payments do not qualify for the earned income credit. The earned income credit is based on earned money.
Taxpayers need to take a look at the Energy Efficiency Tax Credit. Some of the possible products that may qualify for tax credits include: energy efficient doors and windows, water heaters, insulation, metal and asphalt roofs, along with some heating and air conditioning units. Taxpayers should consult with their tax preparer or visit IRS.gov to determine if a particular item qualifies for an energy tax credit.
Keep track of any post-secondary educational expenses, such as books and tuition. If a student is claimed as a dependent, the taxpayer may receive monies under the American Opportunity Credit or the Lifetime Learning Credit. However, this credit can be claimed by the parent or the student, but not both. Gather records for mortgage payments and real estate property taxes. If you donate to charity, keep records with canceled checks or a detailed list of items donated. If you refinanced, bought or sold real estate, gather those records for possible deductions. Should a taxpayer suffer a loss due to floods and fires and where you live is declared a disaster area, they may potentially be able to claim a loss on their taxes. Taxpayers should check into possible retirement tax credits, such as 401k’s, traditional and other individual retirement account plans.

There is a large selection of tax-preparation software on the market. These programs will walk the taxpayer through a list of possible deductions one step at a time. Some of these programs include TurboTax and TaxACT. Many of these tax preparation services can be accessed online. Taxes can also be prepared and filed through IRS.gov. Many taxpayers have switched from paper filing to electronic filing, or e-file, allowing for a fast processing time. Refunds can be send via the mail in the form of a check, or they can be deposited into a banking account. Refund checks take several weeks to receive, whereas a refund into a banking account can be received in approximately eight days. For taxpayers who file more than a 1040 EZ form, peace of mind comes with having a tax professional prepare and file your taxes. Certified public accountants, along with trained agents of tax preparation companies, are a good choice for those taxpayers who find the task of filing taxes overwhelming and staggering. These trained experts can give taxpayers peace of mind.