December 27, 2005
The new year is right around the corner, and that means so is tax season. Here are some ways you can start preparing now to perhaps make tax time as painless as possible.
As 2005 comes to an end, tax time will soon begin. That means if you haven't gotten all your paperwork in order, now is a good time to start getting organized.
"Go into your records and pull receipts from medical expenses, charitable deductions, real estate taxes, mortgage interests, student loan payments," said Virginia IRS spokesperson Gloria Wajciechowski.
"If you can pull your paperwork together then taxes are a pretty painless thing," added owner of Liberty Tax Service, Libby Edwards-Allbaugh. It's also a good idea to make those end-of-year payments, to maximize your return.
"Go ahead and move that payment such as a mortgage interest payment into 2005. If you have medical expenses and you itemize deductions and they're going to be more than seven and a half percent of your adjusted gross income, make that payment by 2005," advised Wajciechowsk.
For instance, if you're an educator who will need classroom supplies but won't get reimbursed, there is a $50 above the line deduction that expires at the end of the year. Interest on a school loan is also deductible, so go ahead and make that payment as well. Also, don't forget about those charitable contributions.
"Donations to Goodwill, Salvation Army, places like that, they're usually worth a lot more than people think and if you come prepared with those receipts you can get good deductions for those," said Edwards-Allbaugh.
Also keep in mind that the standard deduction for 2005 is higher than last year. It's at $10,000 for a joint return and $5,000 for those filing single, so hopefully, these suggestions will help things run more smoothly when the official tax time rolls around.
Experts say with e-filing and tax preparation software, there shouldn't be any pain in getting your taxes done.