15 Tax Tips for a Smooth Filing Season

The 2022 tax filing season is now upon us, so you need to get ready to submit your tax return for 2021. If you want the process to go off without a hitch, here are some essential tips to follow.

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This year's tax filing deadline is April 18. If you don't owe the IRS money, there's technically no penalty for being late with your taxes. But steep penalties will apply if you owe money and your return isn't in on time, so note that deadline and make sure to meet it.

There are certain documents you'll need to file taxes, like the W-2 your employer sends or your 1099 forms. Take a look at last year's tax return. If your circumstances are comparable this year, that should give you a sense of the documents you’ll need. Make a checklist to ensure that you have all the right information.

Your tax forms might trickle in via mail during tax season. As they arrive, store them in a folder, but also scan a copy of each one and store it electronically. That way, you'll have a backup if any of your physical copies get damaged.

ALSO READ: The 13 Most Common Tax Forms

It could make sense for you to itemize on your taxes this year. But if you won't be itemizing, you won't need the same level of documentation. Thus, it pays to run some numbers early on to see which route you'll be taking.

If you own a small business, there may be a host of expenses you can write off on your taxes. Go through your credit card statements and start tallying up those expenses to get a sense of what your total deduction will be.

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You may have gotten a side hustle to drum up extra income in 2021. If so, you'll need to report your earnings. The same holds true for things like savings account interest -- the IRS counts it as income, so it needs to go on your tax return.

ALSO READ: 5 Side Hustles You Can Do on Your Own Schedule

If you sold any investments at a loss in 2021, you can use those losses to offset capital gains. You can also use capital losses to offset up to $3,000 of ordinary income. Take a look at your brokerage account and see if you're sitting on losses that could work to your benefit tax-wise.

The sooner you begin doing your taxes, the more time you'll have to address concerns or questions that might pop up along the way. Though taxes aren't due until mid-April, you may have all of the documents you need to file your return by mid-February, so you might as well get started.

If your taxes aren't complicated, you may be able to file them yourself. But if you own a business or have a more complex return, you may need the help of a tax preparer. Make sure to secure that help well ahead of the April 18 deadline, because good tax professionals tend to book up in advance.

Guessing at tax deductions is a good way to increase your chances of an audit -- or run into trouble if your return is flagged for further scrutiny. You might remember that you spent roughly $10,000 on medical expenses in 2021. But a round number like that could raise a red flag, so you're better off tallying up your receipts and using the exact figure for a deduction.

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A third round of stimulus checks went out in 2021. If you didn't receive a stimulus but were entitled to one, it's not too late to claim that money. Do some research to see if you should've gotten a payday.

ALSO READ: Millions of Americans Can Claim More Stimulus Money Starting Today

Mistakes on your tax return could delay your refund or even result in your return getting rejected. That's why it's smart to check your return carefully before submitting it. Pay attention to things like your Social Security number (it's easy enough to transpose digits) and your wage totals from your W-2 or 1099s.

Filing taxes electronically could reduce your chances of making an error. Just as importantly, electronically filed returns are typically processed much faster than paper returns, so if you're due a refund, it pays to go the electronic route.

If you're getting money back from the IRS, signing up for direct deposit could get you paid quicker. Just make sure to input the correct bank account details. The wrong account or routing number could hold up your refund and create a headache for you.

You may be anxious to receive your refund if the IRS owes you money. But don't expect that money to hit your bank account the day after you submit your taxes. It commonly takes the IRS up to three weeks to process refunds for returns filed electronically, while the turnaround for paper returns can be twice as long. Furthermore, the IRS is still dealing with a backlog from 2021, so you may have to wait longer than usual to get the refund you're due.

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Filing a tax return can be a stressful process -- but it definitely doesn't have to be. These tips could set the stage for an easy filing and a more pleasant experience for you.

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