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(Paul Fraughton | The Salt Lake Tribune) . Tammy Rider, an Individual Taxpayer Advisory Specialist, gives some tax advise to Sione Manu at the Taxpayer Assistance Center in downtown Salt Lake City. Filing taxes for the first time can be confusing, but there are several places to find help.
7 steps to consider as you prepare your tax return

Strategies » Get paperwork organized early, be aware of tax-law tweaks.

First Published Feb 21 2014 07:56 am • Last Updated Feb 22 2014 12:50 pm

Tax Day is less than two months away. Are you ready?

Hare some of the key points to keep in mind as you begin to focus on preparing your tax return, as well as a few new wrinkles for the 2013 tax year:

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1. Get organized » The first step toward preparing an accurate return is to make sure you have all the necessary documents. At the top of the list are the forms detailing your income for 2013. This could be various 1099 forms, typically received by workers hired on a contract basis, or a Form W-2, commonly issued by employers of salaried or wage workers.

Taxpayers who did a lot of independent contractor work will need to make sure they have a complete set of 1099s.

2. Understand what income is taxable » People who receive income from other sources aside from an employer should make sure they know whether they need to include those earnings as taxable income on their return. Some examples of income that are usually not taxable are child support payments, gifts and inheritances, and welfare benefits.

Sometimes there are caveats. For instance, scholarship funds used to pay for tuition and books are not taxable. But if you use some of that scholarship to pay for room and board, that amount would be taxable.

The Internal Revenue Service has more details in Publication 525 on IRS.gov.

3. Consider new taxes for 2013 » Lawmakers mostly kept tax laws unchanged in 2013, but there are a few tweaks that could affect some taxpayers, particularly those who earn more than $100,000 a year. Several changes came about as part of the federal health care overhaul.

One key change applies to medical expense deductions.

Previously, if your medical expenses eclipsed 7.5 percent of your adjusted gross income, you could deduct any medical costs above that threshold. For this tax season, the threshold has been raised to 10 percent.


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Another new tax applies to people whose income exceeds $200,000, if they’re single, or $250,000, if they’re married and filing jointly. The government will apply a 0.9 percent tax to income above those thresholds.

"This could catch particularly married tax payers by surprise," said Lindsey Buchholz, a principal analyst at H&R Block.

That’s because employers won’t start withholding this tax until the person’s income exceeds $200,000. Married couples who separately have income under $200,000, but jointly surpass the $250,000 threshold, would not have the additional tax withheld.

4. Embrace e-filing » The IRS estimates that more than 80 percent of tax returns are filed electronically. And if you have a refund coming, filing your return electronically and requesting that the funds be paid directly into your bank account is the fastest way to get the IRS to pay up.

Electronic filing usually means using commercial tax preparation software, such as TurboTax. In addition to selling software, H&R Block also offers a way to file a tax return online for free at www.hrblock.com/online-tax-filing/ .

Another option is to go directly through the IRS, which offers a free online tax filing program dubbed Free File. To use Free File, your adjusted gross income in 2013 must have been $58,000 or less. If you earned more than that, the IRS offers free tax forms online that can be used to file electronically. But be aware that there are some exceptions.

For more details visit: http://www.irs.gov/uac/Free-File%3A-Do-Your-Federal-Taxes-for-Free .

5. Consider payment options » You’ve prepared your tax return and realize you owe money.

The IRS accepts payments online, by check or over the phone using a credit or debit card. More details on making payments are available on the IRS website.

What happens if you can’t afford to pay the full amount by April 15? One possible option is to pay in installments. The IRS offers several payment plans, including short-term payment extensions of up to 120 days and monthly installment plans as long as six years. To qualify, you must file your tax return and owe $50,000 or less in taxes, penalties and interest, combined.

If you owe between $25,000 and $50,000, you have to agree to let the IRS deduct payments automatically from your bank account.

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