5 Steps to Help You Prepare for Tax Season
The new year comes with new goals, hopes, and cheer. It also comes with the looming threat of another tax season. If the idea of doing your taxes every year causes stress in your life, you’re not alone. Local, state, and federal tax codes are needlessly complicated, but filing your personal tax return this year can be quick and easy if you do the right preparation. Here are five steps you can take to make sure this tax season doesn’t keep you up at night:
1. Store Your Tax Forms and Statements
At the beginning of the year, you’re going to start receiving several tax forms and income statements either through the mail or electronically. By keeping all of these tax documents in a single location, you’ll know where to access them later when it comes time to filing your return. Struggling to find a specific document at the last minute is a major cause of stress.
2. Start Saving
If your employer doesn’t withhold part of your income for taxes, or you’re an independent contractor or self-employed, you’re likely to owe the government money when it comes time to file. The sooner you start putting money aside, the easier it will be to pay when the time comes.
3. Decide How You’re Going to File Taxes
There are more options than ever for filing your taxes. Knowing which method you’re going to use now will prepare you for the work that needs to be done later. Before you make your decision, research each option to see which will make your life easiest. You may be trying to get the most out of your refund, or minimize the amount of money you owe. If you need help navigating the complicating world of taxes, contact a World Finance Tax Specialist . Our tax preparation services are here to help you.
4. Research Possible Deductions
The standard tax deduction provided by the IRS provides optimal tax savings for many individuals and couples. You may want to consider itemizing if you meet certain conditions, including paying interest on your home, extensive medical expenses, charitable donations, and even your state and local tax bills. Research deductions now and save the relevant statements, receipts and documents for later.
5. Prepare an Extension If Necessary
Planning ahead for tax season will probably mean that your return will be filed well before the April 17th deadline this year, but unexpected events can cause your schedule to change. If something does happen, such as an illness or family emergency, get your extension filled out and sent in early so that you don’t have to worry.
The sooner you start preparing, the more likely you are to be in a better position once tax season comes around. To provide you with a quick recap, start by storing your important tax documents and income statements. If you think you might owe money, set aside some of your income. Figure out how you want to file your taxes. You can file taxes yourself with tax software or hire a professional tax preparer. Research possible deductions to get the most out of your tax return. If you need more time to prepare, file for an extension. If you have any questions on how to get the most out of your refund or minimize the amount of money you may owe, contact a World Finance Tax Specialist today.