How to Get a Head Start on Taxes

The IRS is still updating its systems, but that doesn't mean you have to wait to start filing.

By + More

It turns out that some itemizing taxpayers will have to wait until mid-February before they can file their tax returns. The IRS hasn't had a chance to update its processing systems for all the late changes made to tax law and will need a few more weeks to get things up and running.

Fortunately, many online tax preparation packages will still let you prepare your taxes and hold them until the IRS gives the green light to start e-filing. So, those who want to get a head start on their taxes can still file right now. Some will have to wait until mid-February until it is processed but everyone can start preparing them today.

[In pictures: 10 Ways to Improve Your Finances in 2011.]

If you are due a tax refund, you should file your return as soon as possible so you can get your rebate as soon as possible! So, let's review what may be holding you back from filing your taxes today (beside the aforementioned delay, which we can't do anything about) and see if we can't speed it up a little.

W2s

The Form W2 is what your employer uses to inform you and the IRS of your compensation for last year. The deadline for your employer to mail this out is January 31st, which means it'll be February by the time you receive it. For all intents and purposes, this number is available today because you final day of 3010 compensation was December 31st. While it's often safest to wait until your W2, the information you need should be included in your final paystub. If you are industrious, you can use that information to fill out your tax return and then review it once your receive your W2.

1099s

If you want to get ahead with 1099-INT forms, which reports interest earned from deposit accounts, many online banking sites give you the opportunity to download your forms as soon as they are ready. If you plan on filing your taxes online, which is faster and more secure than regular mail, you won't need to submit either forms with your return. Since the information is electronically transmitted to the IRS, it's important to get this right but not as important to get the physical form itself.

[Visit the U.S. News My Money blog for the best money advice from around the web.]

If it's after January 31st and you have everything else, try logging in to get this last piece of data. Unfortunately, outside of these two documents, you'll have to wait for everything else. Documents like 1099-MISC, which covers miscellaneous payments have a due date of January 31st but little access online. If you have a good list of sources, you can treat these like W2s. You fill in a number until you can confirm it. Fortunately, unlike W2s, 1099-MISC forms are very straightforward (no deducting state taxes, retirement account contributions, etc.) so this is more effective than with a W2.

Finally, you have until April 15th to contribute to a Roth IRA. Be sure to remember the Roth IRA contribution limits as you don't want to contribute too much to your Roth IRA and be sure to notify your broker that this contribution is for the 2010 tax year. By default they will consider it a 2011 contribution unless notified otherwise. Happy tax preparation!

Jim Wang writes about personal finance at Bargaineering.com. When he's not tackling money issues, he's usually looking forward to his next vacation and writing about it at Wanderlust Journey.