A 5-step guide to preparing for tax season

Simplify tax season and potentially enhance your return by following these 5 steps.

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Though the growing pile of tax forms and other paperwork can at times feel a bit daunting, preparing your 2017 tax return may not be as complicated as you fear.

Follow these 5 steps to take a bit of the stress out of filing your taxes while potentially enhancing your refund:

1. Start ASAP.

While Tax Day typically falls on April 15, due to calendar quirks this year's federal income tax returns aren't due until Tuesday, April 17, 2018. Our recommendation? Fight the inevitable temptation to procrastinate. Make the most of that extra couple of days: rushing through your taxes at the last minute can increase the likelihood that you'll make a costly error.

And that's not the only upside to beginning your tax return ahead of the deadline. For example, early filers receive their refunds quicker and are less likely to be victims of identity theft. Plus, the sooner you send off your taxes, the sooner you can check that task off your to-do list and use that freed-up time and energy to accomplish other goals.

2. Get organized.

Gather your tax documents, including Forms W-2 (which report employment wages) and 1099s (which report income from self-employment earnings, interest and dividends, government payments, and other sources). Other common documents include statements from interest-earning bank accounts or from a mortgage or student loan company, detailing interest payments made over the course of the year.

Companies must send your tax documents by the end of January. As these forms arrive by mail or email, set them aside in a designated folder for safekeeping. If you haven't received all expected paperwork by mid-February, request that those employers/companies outstanding should resend the documents. You may be able to download some tax forms directly from NetBenefits.comLog In Required (from the homepage, select Quick Links > Summary > Bank/Tax Information) if you have a Fidelity workplace savings account.

3. Take advantage of available tax credits and deductions.

Tax credits

One of the most valuable tax credits is the federal earned income tax credit (EITC). The rules are complex, but many people who might not think they qualify may be eligible. For example, a married couple filing jointly, with three or more children, might be at least partially eligible as long as their earned income and adjusted gross income (AGI) are below $53,930.

Most states also offer an EITC. See if you're in one of them.

If you have children, you may be able to claim the Child Tax Credit, which can bring your taxes down even further. Filers with low-to-moderate incomes may also qualify for the "Saver's Credit," which provides a credit worth up to 50 percent of retirement savings up to $4,000 for married filers—depending on your AGI.


From home office costs to interest paid on your mortgage, there are dozens of expenses that can lower the total income on which you pay taxes, via qualifying deductions. Keep in mind, you do need to itemize—that is, claim deductions that add up to more than the standard deduction—in order to benefit in most cases. One exception is student loan interest: that's a deduction you can generally take even if you don't itemize. On the other hand, to qualify, your income has to be below certain limits; you can't be named as a dependent on anyone else's return; and the deduction is limited to $2,500 per year.

4. Don't overpay for assistance.

Tax help is available if you feel overwhelmed, and it may be more affordable than you think. Those earning less than $54,000 per year are eligible for free assistance with their returns. (Income is just one of the qualifying factors for assistance.) Visit IRS.gov to find volunteer preparers in your area.

You can also see if you're eligible for Free File, the IRS's free tax-preparation-and-filing software for federal individual income taxes.

5. Use your refund to build your emergency savings.

If you're getting money back, make a plan for how you'll use that cash to help you achieve your financial goals. Rather than the fleeting joy of a windfall splurge, for example, you may want to put that money toward the more lasting foundation of beefing up your emergency fund. Experts recommend having at least three to six months' worth of expenses on hand to cover any unexpected costs, like medical bills or a car repair.

Finally, jot down any lessons learned this year to make your process easier next year. Then, relax—you've made it through another tax season!

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Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
The statements and opinions expressed in this article are those of the author. Neither Fidelity Investments nor your employer can guarantee the accuracy or completeness of any statements or data.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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