We always go to H&R Block - and our lady is FABULOUS!!! (If you're in the Wheeling area, and want to try her out, let me know and I'll get you her info.) She's been doing my taxes since I was probably 15 or 16 (yes - I've been filing ever since that age, and yes - she's so good that I've driven the 8 hrs round-trip for the 10 years I lived in Central Penna for her to do them!). She's SIMPLY AMAZING - and always gets us a HUGE refund. Okay, technically I get us a huge refund. But each year we discuss with her probable "upcoming changes" in our lives (like a job change, buying a house, having a baby, moving, etc.), and she's given us advice about what we should keep records of so that we can claim more based on those changes.
Now, I'm NOT about to get all personal with you about the specifics of our tax refund. BUT - I've been asked by several people HOW we can get so much back as a refund - without us spending hours and hours working on it. THAT I'm willing to discuss.
I keep an envelope on my desk, marked "TAXES". Whenever I pay a bill that could be deducted from our taxes, it's immediately put in that envelope. One example is our internet (Aaron only uses the internet at home for work - personal emailing is done on his blackberry - he and I probably both use the internet equally - so HALF of our internet bill is tax deductible).
Also into this envelope goes: receipts for charitable donations (paid by check), medical bills (receipts for medicine, doctor office visits, hospital stays, etc.), stubs from paying our property and school taxes, receipts for anything Aaron buys for work (blackberry holster, some of his magazine subscriptions, ink for our printer - only if it's for work related printing, etc.), etc.
I always store the "GoodWill Valuation Guide" in here also. Whenever we take items to the Salvation Army, we always ask for a receipt. They date it, sign it, and give it to us. WE are responsible for ACCURATELY listing the items donation, condition, and value of each item. So, I always make a list of what's in the bags before Aaron leaves the house to drop them off. You can find their suggested values for your donated items HERE. For those of you who don't donate your used, but still good items - or do donate, but don't think it's worth your effort to get a receipt ... ONE PAIR OF WOMEN'S JEANS ARE WORTH $21. So, if you take the five pair that are two sizes too small and stuffed in your closet (and a fire hazard), you can claim $105 OFF your taxes! TRUST ME - IT'S WORTH IT! You do NOT need to have photos of your donated items - just a list on their receipt. If you donate more than $5,000 in one year, you need a different form from the Salvation Army (which also lists from THEM how much they resold the item(s) for), so just make sure your donations are less than that each year.
As the year progresses, I also put in here the quarterly offering statements from our church, and statements about our various investments (only the ones that are needed for our taxes). When the next one comes, I remove the previous.
I have never been audited, but I know people who have. So, I always make sure that I have COMPLETE documentation for EVERY item I claim off my taxes. I do NOT want to come up short if/when my time comes for an audit. So, the next part of prepping for our taxes involves our checkbook.
Whenever I write a check that could possibly be tax-deductible, I mark it in the checkbook. "T" means tax-deductible - "M" means medical. Our bank doesn't return checks, and our statement doesn't show a copy of the cancelled check. I can view cancelled checks for 3 months for FREE, but anything after that I'm charged for them to "research" the account. (pathetic, isn't it?!!?) So, every third month (four times a year), I have it marked on my calendar (which I use DAILY) to print out any possible tax-deductible checks.
See it there? (Along with changing the furnace filter, and rotating our mattress?) Once a check's printed, I highlight the "M" or "T" in my checkbook, and the printed copy goes into my tax envelope.
SO........ once the time comes to get our paperwork together and file our taxes, all I have to do is empty the envelope - separate its contents into the corresponding piles - put in order, and crunch a couple numbers. EASY PEASY! Generally, it takes less than an hour. This year was more involved, because we were able to count certain aspects of relocating (since it was for Aaron's job), and we had two houses worth of taxes and mortgage interest.
This year my stack of "tax stuff" is probably 2 inches thick. It's broken down into these categories: Charitable Donations, House Stuff (mortgage interest, taxes, etc.), Aaron's work stuff (mileage, magazines, internet, items purchased, etc.), Investments, and Relocating. There's also a couple items that don't fit with anything else - like our safe deposit box. This year "medical" didn't add up to 7.5% of our adjusted gross income. But due to a change in our insurance, it's possible that this coming year it will, so I'm still keeping those receipts!
For those of you who own a house, and HAVEN'T gone to H&R Block, I HIGHLY RECOMMEND IT - at least once! Most likely there's more things you can claim, that you're not aware of. It's well worth the money for you to go at least once!!!
Click on these links at the H&R Block website for info on itemizing (and some deductions you can claim even if you don't itemize)!
There's TONS more info on their website - so make sure you check it out. Don't sell yourself short of a fat refund check just because you didn't take the time to do your homework.