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Individual Tax Tips

Tips For Early Tax Preparation

The earlier, the better when it comes to preparing your taxes. The IRS encourages everyone to get a head start on tax preparation. Not only do you avoid the stress of last-minute rushes, but early filers also benefit from receiving quicker refunds.

Here are five ways to get a good jump on your taxes before the April 15 deadline:

  • Gather all records in advance. Make sure you have all of the records you need, including W-2s and 1099s. Always save a copy for your files.
  • Get the proper forms. They are available at all times on IRS.gov in the Forms and Publications section.
  • Take your time. Do not forget to take a breather while filling out your tax return. Rushing this process can result in mistakes — and that can be very expensive!
  • Always Double-check your math and Social Security number. These two items are among the most common errors on tax returns. Double checking reduces your chances of being contacted by the IRS.
  • Get the fastest refund. Whenever you file early, your refund will come faster. Using e-filing with direct deposit will result in refund receipt in half the time as traditional paper filing.

Selling Your Home

If you sold your only home, you may be eligible to exclude up to $250,000 of gain ($500,000 for married taxpayers filing jointly) from your federal return. This exclusion is allowed every time you sell your main home, but generally no more frequently than once every two years.

To make sure you are eligible for this exclusion, your home must have been owned and used as your main home for a period of at least two out of the five years prior to sale. You also must not have exclude gain on another home sold during the two years before the current sale.

If you and your spouse file a joint return for the year of the sale, you are eligible to exclude the gain if either of you qualify for the exclusion. Both would have to meet the use test to claim the full $500,000 maximum amount.

To exclude gain, a taxpayer must both use and own the home as a principal residence for two of the five years before the sale. The two years may consist of 24 full months or 730 days, either or. Short absences, such as for a summer vacation, count as periods of use. Longer breaks, such as a one-year sabbatical, do not.

Charitable Contributions

When starting your federal tax return, don't forget any contributions to charitable organizations. Your donations can add up to a decent tax deduction for your personal taxes if you itemize deductions on IRS Form 1040, Schedule A.

Provided are some tips to help make sure your contributions are applied to your tax return:

  • You can't deduct contributions made to individuals, political organizations and candidates, the value of your time or services and the cost of raffles, bingo, or other games of chance.
  • Organizations can tell you if they are qualified for claiming donations to them are deductible.Taxpayers can also search the Exempt Organizations Select Check online tool, to check that an organization is qualified. In addition, taxpayers can call IRS Tax Exempt/Government Entities Customer Service at the phone number 1-877-829-5500. Be sure to have the organization's correct name and its headquarters location (if available). Churches, temples, synagogues, mosques and governments are not required to apply for this exemption in order to be qualified.

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