KNOXVILLE (WATE) – If you have gathered your income tax documents in one place and have them in order, and you’re ready to file electronically, the IRS says it is ready to begin accepting your tax returns beginning Tuesday.
The earlier you file, the earlier you will receive your tax refund. Last year, about 75 percent of taxpayers received a tax refund near $3,000. The IRS says that most taxpayers who e-file with direct deposit will receive their federal tax refund within 21 days or less. The government says when you go online, and e-file with direct deposit, it is the fastest way to get your federal tax refund.
While filing out those forms can be a pain, most people will do all the work by themselves. The IRS predicts about four out of five taxpayers will prepare their own taxes using tax software this year. The rest will likely pay for professional tax.
However, in some cases, you may be able to file your federal and state taxes absolutely free.
Before you begin, you have to organize your tax documents to know what you have. Gather and keep all your documents, forms and receipts for tax-deductible expenses all in one place. Then, keep a folder next to where you place mail. That way, when W-2s, 1099s and other relevant forms roll in, you can keep them together in an accessible spot so you’re ready to go when you sit down to file your taxes.
Remember what you did in 2015. Big life events such as getting married or having a baby are easy to remember, but little expenses that can add up to bigger deductions may be forgotten.
Gather receipts and have them in hand for expenses related to your job search, day camp for the kids, charitable donations and medical expenses, to name a few. These expenses may help you get a bigger tax refund.
If you have an employer provided retirement account, now is a good time to think about maximizing your contributions in the new year. For 2016, you can contribute up to $18,000 in your 401K and 403B plans. The figure is $6,000 if you are age 50 and over.
Don’t forget to maximize your IRA. If you have an IRA account or are contemplating opening one, you can contribute up to $5,500 to your IRA until the tax deadline – which is April 18 this year – and still reap the benefit of a deduction on your 2015 taxes.
You may also be eligible for the saver’s credit up to $1,000 for an individual, $2,000 for a married couple.