It's probably safe to say no one enjoys doing their income tax returns, with the possible exception of professional accountants. However, your taxes must be filled out and sent in by the infamous April 15 deadline.
Each year, Ruth to the Rescue gathers tax advice that might help you get your return in order.
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Charitable Deductions: Proof, Proof, Proof!
If you are able to take charitable deductions be sure to keep the one thing the IRS might ask for one day, proof! You will need to document all the donations your are claiming.
"If you throw $5 in a red kettle, that's not something that you'll be able to claim on your tax return because you have no forms of documentation or receipts," said Jennifer Owens, a tax expert at H&R Block.
If you are going to donate non-cash goods, you will have to come up with a legitimate value to place on those items. Owens says there is a Salvation Army guide that can help you determine how much many items are worth.
Click here for the donation value guide
"That gives you kind of an idea if its in good condition or poor condition, how much you can actually claim when it comes to that charitable donation," Owens said.
She also advises that you take photos of the items you donate as further proof, should the IRS come calling.
And, what about donating your used cars to a charity of your choice? You've probably seen the signs asking for your older vehicles. Owens says all those charities are not the same, and you'll need to so some homework before you decide to donate.
First, find out what value you will be allowed to claim for the car. Some charities are allowed to offer Blue Book value, but it depends on how they use the vehicle you donate. Also, ask what kind of proof you will receive to show the IRS.
It's important to have as much proof as possible because the IRS has great latitude during an audit.
"Essentially, the IRS could then disallow everything on the given form they're auditing," Owens said.
Big Change For 2014
This year millions of tax payers are dealing with a big change on their 2014 returns.
"The Affordable Care Act is the biggest change to tax law in 20 years," Owens said.
For people who receive health insurance coverage through their employer or the government, the change will be small this year. There's a box on your tax returns you must check to show that you had coverage for 2014.
The ACA requires everyone to have some type of coverage. For 2015, you will need to provide proof of coverage, but this year, you're just checking a box.
The changes are more pronounced for two groups of people: those who purchased insurance coverage through the insurance Marketplace and those who did not have coverage.
People who purchased insurance coverage through the Marketplace were required to estimate their income to determine what kind of subsidies they would receive to defray the cost of health insurance. They will receive form 1095-A which explains the subsidies they received. Then, they will use form 8962 to reconcile the estimate with their actual income. Any discrepancy could have an impact on the size of their tax returns.
"Approximately, 52 percent of taxpayers actually underestimated their income and therefore have to pay back part of their advanced premium tax credit- which on average is about $530," Owens said.
Penalties
For anyone who didn't have coverage for all, or part, of 2014, they will have to pay the penalties required by the ACA for the first time as part of their tax bills.
If you fall into either of those two categories, it's important for you to add a little extra time to your tax preparation to account for the additional steps you will need to take. It's the first year tax payers are really being affected by the Affordable Care Act and growing pains are to be expected.
"Taxpayers are asking a lot of questions about the penalties, exemptions, the reconciliation and the new tax forms," Owens said.
Missed Deductions, Don't Leave Money on the Table
Each year, taxpayers should make sure they are taking every deduction possible to lower their tax bill. The experts at H&R Block say many people miss deductions and pay more taxes than necessary.
"About 20 percent of taxpayers actually miss out on the Earned Income Tax Credit each year," Owens said.
The Earned Income Tax Credit (EITC) is for people with low-to-moderate income. They can qualify for about $6000 in tax credits. Other deductions tax payers miss include: education credits, state and sales taxes, job search expenses, gambling losses, and charitable deductions.
Running Out of Time? Don't Panic
If you end up running out of time in April to get your forms 100 percent complete, don't panic. You can easily request an extension with form 4868.
The extension is automatic, you don't even have to come up with any excuses, like your dog ate your tax return. Just file the form, and you have until Oct. 15 to get your paperwork in order.
There is one important catch! If you estimate that you will owe money, you must send a check along with form 4868. Otherwise, you will have to pay penalties and interest when you do finally pay.
Running Out of Time? Don't Panic!
If you end up running out of time in April to get your forms 100% complete, don't panic! You can easily request an extension with form 4868. The extension is automatic, you don't even have to come up with any excuses, like your dog ate your tax return. Just file the form, and you have until October 15th to get your paperwork in order.
There is one important catch! If you estimate that you will owe money, you must send a check along with form 4868. Otherwise, you will have to pay penalties and interest when you do finally pay.
Further Advice
If you have further questions, you should seek out the counsel of a trained tax preparer or do your own homework on the IRS website.
Special coverage: Taxes