March Financial To-Do List + Calendar

We’re two months into our 2020 journey toward financial wellness, and we’ve covered some big topics so far—goal-setting in January and debt repayment in February—checked off a few to-dos, and perhaps you’ve already seen some progress. But the first signs of spring mean only one thing in the finance world: taxes.

This five-letter word is enough to scare away Millennials, billionaires, and corporate powerhouses alike. But taxes don’t have to be intimidating; it’s simply a matter of breaking them down into a set of manageable tasks. For our March financial calendar, we’re focusing on tax tips to help you not only get through tax season, but make it as seamless (and as rewarding) as possible.

Get a jump start on your tax needs by following our simple checklist. From figuring out your filing requirements to gathering the important documentation needed to finish your tax return, we’ll walk you through all the steps needed to get your tax filing on the right track. 

1. Figure Out if You Need to File

First thing’s first: figure out if you actually need to go through the trouble of filing at all. A common misconception about taxes is that everyone who makes an income has to pay them, but that’s not actually true! How much you pay in taxes and whether you have to file taxes at all depends on a few factors, such as your income, age, and filing status.

Do I need to file federal taxes?

For tax year 2019, you do not need to file taxes if you:

• Are under the age of 65
• Single
• Earned less than $12,200 in 2019
• Don’t have special circumstances that would require you to file (like self-employment income)          
  • To view additional information, visit the IRS page for filing requirements

If you’re filing as married, the income threshold simply doubles to $24,400. So, if you’re married, earned less than $24,400, and met all of the above requirements, you don’t need to file federal income taxes.

Do I need to file state taxes?

It depends! Each state has their own income tax laws, so depending on where you live, you may or may not need to file state taxes. Check with your state’s tax agency or use tax preparation software to determine whether or not your state collects income taxes.

Note: Tennessee and New Hampshire do not tax wages, but do tax investment and interest income.

2. Gather Important Documents: W2s and 1099s

To file your taxes in compliance with federal tax code, you’ll need to provide some important personal and financial information. Use this tax preparation checklist to file your taxes in accordance with federal guidelines.

Personal information 

• Your Social Security number and date of birth
• A copy of your 2018 return
• Your bank account number and routing information for direct deposit

 

If you’ve filed taxes before, you’ll also want to be sure to dig up last year’s return—hopefully it’s in an organized space nearby—or saved within an electronic tax filing database like TurboTax. Your return from last year will help you answer important questions from the IRS regarding your 2019 tax return.

Income info

• W-2 form(s) and/or 1099 form(s)
• 1099-C ,1099-G, 1099-MISC
• 1099-R, 1099-S, 1099-INT, -DIV, -B, K-1
• SSA-1099
• Alimony received 
• Business or farming income received
• Rental or property income
• Miscellaneous income (jury duty, gambling winnings, scholarships, etc)

Adjustments to income

• Form 1098-E
• Form 1098-T
• Records of IRA or self-employed pension contributions made
• Receipts for MSA contributions
• Alimony paid

Supporting documents for deductions & credits

Gather receipts and relevant information for deductions and credits to be claimed.

Taxes paid

Proof of taxes paid including state and local income taxes, estimated taxes, real estate taxes, and property taxes.

 

Note: If you are filing with your spouse or have dependents, you’ll need to have copies of their tax information as well.

3. Review Your W-2 (and other tax documents)

Mistakes happen! Before filing your taxes, be sure to verify that any and all of the information on your paperwork is accurate. Filing your taxes with misinformation could trigger a tax audit or impact how much you owe to the IRS or your state’s tax agency.

When verifying the information on your W-2, review the following information:

• Your personal information
  • Name
  • SSN
  • Address
• Reported wages
• Taxes withheld 
• Company information
  • Name/DBA
  • Address
  • EIN

Note: If you received a 1099 for the 2019 tax year, be sure to verify the above information as well.

4. Determine Filing Status

There are several factors that impact your tax liabilities—your income, how many deductions or credits you qualify for, and your filing status. Your filing status gives the IRS and state tax agencies some insight into your personal and financial situation. Are you single and managing your finances on your own, or do you and your spouse share ownership? These factors can influence how the government determines your tax liabilities.

There are five filing statuses to choose from:

• Single
• Married filing jointly
• Married filing separately
• Head of Household
• Qualifying widow(er) with dependent child

When selecting your filing status, be sure that it accurately reflects your circumstances as an incorrect filing status could lead to a tax audit.

5. To Itemize or Not to Itemize, That is the Question!

If you’re like most taxpayers, you’ll want to save as much money as possible when you file your taxes. To help you reduce your tax liability, the IRS offers two types of tax savings: the standard deduction and itemized deductions. You can only choose one method, so it’s wise to consider how much you’d be able to save with each, and then select the deduction that’s most impactful.

The standard deduction is a set amount that qualifying taxpayers can use to reduce their taxable income. Here are the rates for the 2019 standard deduction:

• Single: $12,200 
• Married filing separately: $12,200
• Married filing jointly: $24,400
• Head of household: $18,350
• Qualifying widow(er) with dependents: $24,400 ($25,700 if over 65)

If you choose to itemize your deductions, you’ll choose from a list of line items, each of which have a corresponding value. Of course, you’ll need to qualify for these deductions, so be sure you have supporting documentation in case the IRS decides to conduct an audit. When added up, these deductions will equal a total value which can then be deducted from your tax liability. 

6. Decide how you want to file your taxes

You’ve prepped your paperwork, reviewed your W-2, and searched for tax savings. t’s almost time to wrap up tax season once and for all. There are three methods you can use to file your 2019 taxes:

 

• • File Form 1040 by mail
    • Pro: Free (except postage)
    • Con: Can be complicated depending on your tax situation 
  • Use a tax software program
    • Pro: Convenient and user-friendly 
    • Pro: Automatically reflects tax reform updates 
    • Pro: Maximum refund guarantee 
    • Pro: You can import your financial data
    • Pro: May offer tax audit representation for an added fee

• • • Con: Premium versions cost money
    • Con: Filing taxes online takes time

• • File with a tax preparer
    • Pro: Personalized tax help
    • Pro: Tax audit representation provided (usually for an added fee)
    • Con: Typically the most expensive way to file
    • Con: Tax preparation scams—be careful when selecting a tax pro!  

 

7. File your 2019 taxes

Due to the Coronavirus outbreak, the tax filing deadline has been extended to July 15th, 2020. File your 2019 taxes anytime between January 27, 2020 and July 15, 2020 to avoid late-filing penalties.

Need some more motivation to file? Filing your taxes early can offer several benefits:

• Get your refund faster
• Tax professionals often book up later in the season
• You’ll have more time to pay taxes that you owe

Note: If you don’t have everything you need to file by the July 15 filing deadline, be sure to file for an extension. This will give you a six-month extension to file your taxes, but it will not give you additional time to pay your taxes. In other words, you could be on the hook for late payment penalties.

8. Organize your 2019 tax paperwork for 2020 taxes

After you’ve filed your taxes, you might be tempted to ditch your filing paperwork with reckless abandon and forget about the terrors of taxes until next year. But if you want to make things easier on yourself next tax season, you might want to step back and handle your tax records with patience and care.

In fact, the IRS recommends keeping tax records for at least three years after filing in case they decide to conduct an audit. But here’s another benefit of keeping your tax records organized and handy—remember when you used last year’s return to file this year? Next year you’ll need to do the same thing!

Designate a folder to keep important tax paperwork, receipts for deductions and credits, old W-2s, etc. This way you won’t have to scramble when it comes to filing next year.

Key Takeaways

Taxes don’t have to be as scary as they’re made out to be. Use this filing checklist to help you break each task down into manageable steps.

Prefer to do your financial planning online? Create an editable copy of our monthly template in three easy steps:

1. Open our Calendar Template in Google Sheets
2. Select “File”, then “Make a Copy”
3. Save in your own Google Drive to make edits

Check back in with us in April to grab your next monthly financial calendar and to-do list. We’ll be covering a wide array of financial topics and to-dos throughout the year, including tax prep, salary negotiation, investing, and more, to help you get on the road to true financial success.

Missed our calendars in January and February? Our finance tips can help you throughout the year so be sure to take a look!