My Top 7 Tax Tips for 2012

 The United States Tax Code is about 18,500 pages long, filled with enough “ifs”, “ands”, and “buts” to make your head spin. So I  put together a quick list of my top tips when it comes to filing your taxes this year, to help you have a stress free filing experience.

1)    File electronically. According to IRS.gov, last year nearly 100 million taxpayers submitted their taxes online. When you file electronically through one of the IRS approved e-file providers or for free with Free File , you decrease the chances of making many common errors that can negatively affect your return. Free federal online filing is the easiest way to do your taxes and is the fastest way to get your return. The software takes you step-by-step through the e-filing process, asking you the questions many accountants ask to help maximize your potential deductions. You can find a list of qualified software companies on www.IRS.gov/efile  

2)      Take your time and most importantly double check your math. Software prevents many common math errors when filing, however, if you are filing with a paper return I urge you to sit down, take your time, and double check your numbers. This is important because if you do make a mistake in your taxes, you will need to amend it (with Form 1040X) which will take an additional 8 to 12 weeks from the IRS receipt date until the amendment is processed.

3)      Be sure that your Form W-2 and all Form 1099s are correct. When you receive these forms go over them and make sure all of the info is correct. If you find an error, have it corrected as soon as possible so that the IRS’s records agree with the amounts you show on your return. (Contact your employer to get these issues resolved.)

4)      Double check that your social security number has been correctly written on the return.  This seems so simple, but still so many people do not do it, so save yourself the time and stress, by checking this information right off the bat. If you are filing a paper return, make sure to include your social security number on each page of your return in case the IRS loses a page, it can be reattached quickly and easily. If you are married, check that your spouse’s social security number is properly listed, whether filing a joint or separate return.

5)      Get the right routing and account numbers. I love that these days you can make your tax return automatic by getting it deposited directly into different accounts.  But you need to make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or even worse, deposited into the wrong account.

6)      Make sure you take the Tax Credits and Deductions that are rightfully yours. Every year, the IRS collects millions of dollars in overpaid taxes. And guess what? They get to keep them—that’s right, they get to keep money that rightfully belongs to you. This year, make sure you make all the deductions applicable to you and your situation. There are deductions from everything to contact lenses to lead paint removal. For more in depth itemized tax deduction, go to IRS.gov and type the words “tax deductions” into the search bar.

7)      Keep copies of all documents that you send to the IRS. Use certified mail for all important correspondence to the IRS and make 1 or 2 copies of all the documents you are sending them. Don’t forget to keep your records in good shape so that you can find answers to any IRS questions about your return.

My tax tips are quick and simple—so make sure you do them. They will save you a lot of time and aggravation.

Let me know how you did filing your taxes this year and if you filed electronically or not!

Live Rich,

David Bach

8 thoughts on “My Top 7 Tax Tips for 2012

  1. Hi Dave – thanks so much for sharing. Do you have any tax advice for small business owners/newly-formed S Corp?

  2. Filed taxes using one of the On-Line services. Very user friendly including the supplement forms!
    Thank you for all your comments and blogs concerning money and taxes.

  3. I file my taxes this year with my accountant. No done electronic. My taxes were send by mail, but I did the electronic refund, to go to my checking account, isntead of geting it by mai from the IRS

  4. If electronically free filing the 1040 yourself put an amount (ex.Jury duty)on 1040 line 21, put what is for and the amount in the next block beside that and on the actual Line 21 spot that is added into AGI. I was rejected twice before I figured out just what they wanted.

    AMT exemption amounts for the 2012 tax year are decreased to $33,750 for single, $45,000 MFJ etc. From what I can see the only place they mention this little factoid is in the Form 1040-ES directions. It is going to effect a bunch of people that did not have to pay AMT before, like me and my husband. We are not rich. When are they going to explain this to people who have no idea what the AMT really is and that they will owe alot more tax next year? If they never had to estimate their taxes before they will have no idea what happened until it is pay up, fine, and penalty time.

    I am not new at the IRS non-sense. I have been doing our taxes since the 1970′s. In the 1980′s I was a H&R Block office manager. I keep up on the changes but I would not have seen this coming if I did not have to pay estimated taxes. I called the IRS on this because I thought it must be a mistake. No mistake. Sigh!

  5. Have a friend who works for H&R Block so he did them for me for free electronically…got them back in less than a week!

  6. David i am reading your books and i am starting to put some things in practic so far so good i will keep you posted thank you

  7. David am reading your book, Start late Finish rich, have started to reorganise myself,so far so good.

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