David UffingtonDollars and Sense
December 27, 2011
You’ll be receiving your W-2 and 1099 income forms in the next few weeks. Your 1099 for bank interest and 1098 for mortgage interest paid in 2011 should show up in the same time frame.
When they arrive, check them immediately. Compare to interest reported on your bank statements and your year-to-date income and the deductions from your last paycheck of 2011. If you’re self-employed, check the figures you’ve kept all year. If there are any discrepancies, report them immediately, before you file. The company issuing the forms will be required to send amended forms to you and the IRS.
Even before your forms arrive, you can use your same estimate figures from above to run what-if scenarios with tax software on your computer. If the numbers don’t match once the forms arrive, you’ll be able to make changes in the program. (Take that opportunity to investigate why your numbers don’t match.)
If you’ve never used computer tax software, some of the fairly easy ones are TurboTax by Intuit, TaxCut by H&R Block and TaxACT. Beware any off-brand names that offer to let you do your taxes online. They could be data collecting, and your Social Security number, name and address are valuable to thieves.
Enter the data carefully, especially your Social Security number, amounts and employer ID. Save your file often.
If you used a software program last year and are happy with it, purchase the same brand again. Let the two programs talk to each other. (When it asks if you want the program to import the data from the previous year, click yes.) Assuming you haven’t changed jobs or banks, much of the data, such as employer ID and company name, will transfer to your new software.
The earlier in the season you buy tax software, the more important it is to do the program updates. Tax changes can (theoretically) happen at any time. Every time you sit down to work on your taxes, ask the program to check for updates. Do the same thing with your state tax software.
Most programs will let you do an efile of your tax return. Whether or not you chose this option, be sure to print out a copy (forms and all supporting documentation) of your tax return, including the state return.
David Uffington regrets that he cannot personally answer reader questions, but will incorporate them into his column whenever possible. Write to him in care of King Features Weekly Service, P.O. Box 536475, Orlando, FL 32853-6475, or send e-mail to email@example.com.
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