Tax season is just around the corner. While the official deadline to file each year is typically April 15th, it's wise to start your tax season checklist early. By understanding your deductions and credits, gathering your documents, and choosing a tax preparation method, you can streamline the process and maximize your refund. This article will help you get ready for tax season by providing step-by-step guidance and helpful preparation tips. 

Choose a Tax Preparer

Before you get started preparing for tax season, decide how you’ll file your taxes. If you already have a trusted accountant or financial advisor, they can handle your return. Otherwise consider using tax software from a reputable company. Whichever method you choose, act early. Schedule appointments or purchase software promptly and you’ll be ready to file as soon as you receive all your tax documents. If you prefer to file your taxes independently, the IRS offers a step-by-step guide and online tools to assist you.

Tips for Choosing a Qualified Tax Professional

When selecting a professional for tax preparation, consider the following:

  1. Credentials and Experience. Look for a professional with relevant certifications, such as an Enrolled Agent (EA), Certified Public Accountant (CPA), or Certified Financial Planner (CFP). Experience in handling specific tax situations, like small business taxes or investments, is also valuable.
  2. Reputation and Recommendations. Ask friends, family, or colleagues for recommendations. Check online reviews and ratings to gauge their reputation.
  3. Communication Skills. A good tax professional should be able to explain complex tax issues in simple terms. They should be responsive to your questions and concerns.
  4. Fees and Services. Discuss fees upfront to avoid surprises. Learn about the services included, such as tax preparation, tax planning, and representation before the IRS.
  5. Technology and Security. Make sure your tax professional uses secure software and data protection measures to safeguard your sensitive information.

Make a List of Your Personal Information

Before you begin your tax return, gather essential personal information:

  • Social Security Numbers. Collect the Social Security numbers for yourself, your spouse, and any dependents.
  • Dates of Birth. Have the birth dates ready for all individuals listed on your return.
  • Current Address. Have your current mailing address on hand.
  • Bank Account Information. If you're opting for direct deposit, gather your checking or savings account and routing numbers.
  • Prior Year's PIN. If you e-filed last year, locate your self-selected PIN.

Collect Tax Documents as They Arrive

Here are some of the common tax documents you might receive throughout January and February.

  • W-2. Details your wages and taxes withheld from your employer.
  • 1099-MISC. Reports income from freelance work, rental property, or other self-employment activities.
  • 1099-INT. Shows interest income from credit unions, banks, and other financial institutions.
  • 1099-DIV. Details dividend income from stocks and mutual funds.
  • 1098-E. Shows the amount of interest you paid on your federal student loans.
  • 1098. Lists the interest you paid on your mortgage.

If your employer or financial institution offers electronic delivery, you may receive these documents sooner. Keep all your tax documents together in a secure location. You may also want to provide them to your tax preparer as you receive them to expedite the process.

Gather Your Financial Documentation

As you prepare for tax season, gather your financial documents for smooth filing. The specific documents you'll need will depend on your individual circumstances, including income sources and deductions.

Common documents include:

  • Mortgage Interest Statements. Documentation of mortgage interest paid
  • Property Tax Statements. Records of property taxes paid
  • Business Expenses. Records of business income, expenses, and deductions
  • Investment Statements. Records of investment income, losses, and capital gains
  • Bank Statements. Statements from checking, savings, and investment accounts
  • Retirement Account Statements. Statements from IRAs, 401(k)s, and other retirement accounts

HFCU Tip: Accessing your past financial statements is easy with HFCU's online banking. You can quickly download and save the documents you need for tax preparation. Or, stop into one of our convenient locations for help. 

If you're unsure about which documents are required for your specific situation, consult with a tax professional or refer to the instructions provided with your tax software.

Think About Credits and Deductions

Credits and deductions are tax breaks that can reduce your tax liability. Knowing about, and claiming, eligible credits and deductions can save you money on your taxes.

Tax Deductions

Deductions reduce your taxable income, lowering the amount of tax you owe. To claim deductions, you'll need to provide supporting documentation, such as receipts, canceled checks, or financial statements.

Here are some common deductions:

  • Charitable Contributions – Donate to qualified charities and deduct the amount of your contribution.
  • Medical and Dental Expenses – If your medical and dental expenses exceed a certain percentage of your adjusted gross income, you may be able to deduct the excess.
  • Student loan interest – You can deduct up to $2,500 in interest paid on qualified student loans.
  • Mortgage Interest – Interest paid on your mortgage and property taxes may be deductible. 

Tax Credits

A tax credit directly reduces the amount of tax you owe. Some credits are refundable, meaning you may receive a refund even if you don't owe any tax.

Common tax credits include:

Know the Important Tax Deadlines and Dates For the Season

To avoid penalties, stay informed about key tax deadlines. Here are some important dates to keep in mind for the 2025 tax season: 

  • January 2025: Filing season start date for individual tax returns.
  • April 15, 2025: Due date of filing a tax return or to request an extension for most of the nation.
  • October 15, 2025: This is the extended deadline for filing your tax return if you request an extension.

Final Tax Preparation Tips

Keep your tax documents organized in a safe place. Consider using a filing cabinet, a digital filing system, or a dedicated folder. The IRS recommends keeping tax records for at least three years. 

Remember that tax laws and regulations can change annually. To stay up-to-date, consider subscribing to tax news updates or consulting with a tax professional. 

And consider electronic filing. It’s not only the fastest and most accurate way to file, it also helps reduce errors and can speed up your refund.

Follow these tips to stay organized and simplify your tax preparation process for a stress-free season.