With April 15th just around the corner, I jumped at the chance to talk with Mark Steber, the Chief Tax Officer with Jackson Hewitt. Jackson Hewitt is one of the largest tax preparation services in the country. Mark has been with the company for about a decade and has worked in various facets of income tax preparation for over 30 years.
In the course of our discussion, he provided a series of last-minute tax tips for those who are working to get their income tax returns done by the 15th – or hope to. He also gave us some great tips on tax planning for next year.
Here are Mark’s top 10 tax tips:
- Don’t give up! Between 50 and 60 million people file their taxes between April 1 and April 15, so you’re in good company if you haven’t done so yet.
- Don’t wait until the very last moment. You have up until midnight on the 15th, but if you wait until the very last day, you are more likely to either make a mistake or simply forget to include deductions, credits or other items that could lower your taxes.
- Leverage technology. Download your W-2s and other tax documents so that you avoid errors. Also, use a checklist so that you don’t overlook something that will cause problems later. You can check out Jackson Hewitt’s checklist here.
- Locate last year’s tax return, and use it as a guide, either to gather documentation as needed for this year’s return, or to provide direction in the actual preparation.
- Plan to make adjustments for the current year. After the 15th, use your 2014 tax return to make adjustments for 2015. For example, last year’s return can help you to adjust your withholding taxes for the current year.
- Get into a 401(k) plan now if you aren’t already, or increase your contributions so that your tax liability will be lower in 2015.
- Prepare for life changes that will impact 2015 taxes. If you are making any life changes this year, start gathering information. For example, this is when you will want to have a Social Security number for a new baby.
- Plan on a midyear tax evaluation. Once July comes, we will be six full months into 2015; that will be the perfect time to make any mid-course adjustments necessary to make your 2015 taxes a bit easier.
- Set up a system that will help you to accumulate your 2015 tax documents. It can be an envelope or folder, where you will put any documents that may have tax significance. In this regard, I highly recommend a paper scanner. My personal favorite and the one I use is the Fujitsu ScanSnap.
- Plan to have a professional tax evaluation. If you prepare your own income taxes, have your returns for the last two or three years reviewed by a tax professional to determine if you are overlooking anything. Jackson Hewitt makes this service available for free, as do many other tax preparers.
Also, after the interview with Mark, I respond to some reader’s questions and some other interesting topics, including:
- Coming up with the right asset mix in a 401(k) plan.
- Do you gain international investment exposure by investing strictly in the S&P 500?
- Adding your children to your credit cards in order to help them build a credit history.
- Creating a debt payoff plan.