By Jonnelle Marte
Tax season gets into full swing today, when the Internal Revenue Service begins accepting electronically filed returns.
Once a rarity, e-filing is quickly becoming the norm: a record 100 million taxpayers filed electronically in 2011. That included 77% of individual returns filed, up from 58% in 2008, according to the IRS. A chunk of those taxpayers were do-it-yourselfers: about a third of all tax returns were filed online last year by people who did their own taxes using software, according to IRS data.
But while more people may be filing online, taxpayers still need to gather hardcopies of documents to back up their returns, says Elaine Smith, master tax adviser at H&R Block. For most people, W2 and 1099 forms, which report wages and income, should be arriving in the mail any day now.
Taxpayers should also start tracking down receipts, bank statements and other documents they’ll need to back up deductions and credits, she adds. For example, families claiming education credits will need bills to show what was paid out of pocket compared to what was covered by loans and scholarships, according to H&R Block. Those itemizing deductions will need receipts for job-hunting expenses, medical costs and proof of charitable donations. If you’re not sure what you’ll need, it might help to look to the past, says Smith: “One thing you can do is take a look at your returns from last year and look at what forms you should be expecting in the mail.”
Another part of today’s launch: Free File, which lets those who make less than $57,000 qualify to e-file federal returns for free. But before sitting down to file, taxpayers may want to familiarize themselves with the changes kicking in this year. Taxpayers will be greeted with a new 1040 form that has a different method for reporting gains and losses.
The due date for tax returns is Tuesday April 17 this year because April 15 falls on a Sunday and Monday April 16 is Emancipation Day, a Washington D.C. holiday.
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