It’s tax time again! While it seems that just when you get done with last year’s taxes, it is once again time to file again. Technology is your friend when it comes to filing and preparing your taxes. Of course, there are certain ways to use technology safely that you need to consider. There was an estimated 4 billion records were exposed in 2019 due to a data breach. These five tips can help you to file your taxes safely.
Gather Your Documents
Before you get started, you want to be sure that you have all your documents in order. Having documentation to support your tax return is essential. Many people think that if they are below a certain income level they are not at risk of an audit. However, anyone can be audited. You always want to be able to back up what you are filing.
If you are scurrying around this year to get your documents in order, plan for next year. Technology is available to keep all your documents in order. Use it. Being organized and able to support your deductions is vital to a successful filing.
Know The Laws
You do not need to be a tax expert to know if you can claim something or not. There is a wealth of information online right at the IRS website that can quickly provide the information that you need. As the global economy expands and people are getting an influx of income from “alternative” sources, it is more important than ever to bone up on the tax laws.
For example, if part of your income is considered “foreign income”, about the first $100,000 of that income can be excluded from federal income tax returns. Know your rights before you get started to ensure you do not make costly errors.
Know What is Deductible
Reducing tax liability must be a priority. Know what you are allowed to deduct from your income before you file. Many medical expenses can be deducted. Mental health costs are on the rise they were about $2.5 billion in 2010, and are around $2.7 billion today. If you have had unique medical costs you may be able to deduct those.
If you or your spouse is a small business owner, you may be able to deduct the costs of running that business out of your home, including the cost of technology investments. You get the idea, learn what you can deduct to save. Turn to technology to find your answers.
Use Proven Software
When you are choosing the filing service you will use to file your taxes, be sure to choose a service that has a long track record of being easy to use and effective. This is not the time to turn to new technology that may or may not work out.
There is plenty of valid and tested software available that has been around for a while that can get the job done. Don’t settle for tax filing software that is cheaper but that lacks a proven track record.
Watch Out For Scams
You should always be cautious about who you share information with online or when using any type of technology that is connected through the cloud. Be careful when it comes to emails asking for your information or login credentials. Do not share your information with anyone until you have vetted the person and the company that they work for. This time of year, scammers kick things up into high gear. They know that people are stressed out about their taxes and pose as IRS agents, tax filing companies, and more to get your personal information from you. Keep in mind the IRS will never call you. If they need to contact you, they will use the United States Postal Service. The IRS will not email you either.
You are a few simple steps away from filing your taxes online safely. Just follow these tips and your taxes will be filed for another year without missing a beat.