Like it or not, tax season is upon us, and most people cringe at the thought of filing their tax returns before the Tues, April 15, 2025 deadline. Karen McDougal, accounting instructor in the University of Delaware’s Alfred Lerner College of Business and Economics, says while it is our responsibility, it does not have to feel like a chore. McDougal, who heads up the Lerner Tax Clinic and Lerner’s Volunteer Income Tax Assistance (VITA) relationship with Nehemiah Gateway, offers six tips to help make the process run smoothly.
- Make sure you have gathered all your tax documents. This includes W-2 forms for wages, forms 1099 forms reporting interest and dividends, your mortgage statement and any other documents that arrive with the label “Tax Documents Enclosed”. If you omit any of these documents from your tax return, you could be subject to fines and penalties.
- Check to see if you are eligible to file for free. You can file for free using the IRS system if your income is less than $200,000 in some cases. Using the IRS Direct File system, you can use software provided by the IRS to complete your simple tax return.
- Have multiple types of income? Consider hiring a tax professional. If you have many types of income, if you own a home or business, or if you have children, you may want to hire a tax professional. Although it may be more expensive than preparing your taxes yourself, you may benefit from the advice of a professional well-versed in the tax laws. You can access a list of credentialed tax preparers in your area from the IRS at www.irs.gov. When it comes to preparing your tax returns, “what you don’t know can actually hurt you.”
- Review changes to tax laws to see if they benefit you. Be sure to explore changes in the tax laws that present opportunities to save on taxes or even get a refund. These include the residential energy credits and electric car purchases. There are always tax changes that can offer good tax savings.
- Consider additional tax deductions. It is not too late to snag some additional tax deductions. You can still make contributions to an IRA as late as April 15 and deduct it from your 2024 tax return if you qualify.
- Start planning for next year’s tax season. The best thing you can do is to start planning for next year’s tax filing. Plan your expenses and purchases to take advantage of allowable tax deductions and credits. Utilize as many strategies as possible to minimize your tax liability.
McDougal says the IRS wants you to use the Internal Revenue Code to your advantage. “They want you to pay the least amount of taxes you can legally, and if you plan accordingly, you can do this every single year!”