According to a recent article from Redbook that was featured in MSN’s living section last week, forgotten tax paperwork could save you up to $400 per return!
For the full article refer to: (http://t.living.msn.com/life-inspired/need-dollar5800-its-hiding-in-your-house-2#image=1).
Unfortunately, the article does not go into ways that these forms save you this money. How can a forgotten tax form save you $400 as compared to owing more? One forgotten W-2 with more federal and state withholdings than necessary can result in less taxes owed at year end. Forgotten charity receipts can reduce your taxable income dollar-for-dollar if you are itemizing. A 1098 for home mortgage interest can be one of the largest savings. If you itemize your deductions and have a 20% tax rate, you can save $400 by finding a misplaced 1098 that reports $2,000 in home mortgage interest. However, another way to save is to be sure to file on time. If you forgot to add a good sized chunk of income to your return and find out you need to amend, you will owe penalties and interest on top of the unanticipated taxes.
Staying organized becomes more important during tax time. Be sure to put all of your paperwork in one place or, if you struggle, scan a copy of important tax documents into a folder on your computer. Then during tax season you can forward the electronic documents to your accountant without having to worry about the paper documents being misplaced.
Davis & Hodgdon Associates has been assisting businesses and individuals in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].
Alyssa McBride, Associate Accountant
Davis & Hodgdon Associates CPAs