Preparing For Tax Season

preparing for tax season

The panic can set in if you’re not prepared for tax season. If you’re filing taxes for personal, business, or both, being organized is essential!

With the year ending, the tax season is approaching, and it is about time that you start preparing for it right away if you haven’t already. According to an international survey, more than 80 million taxpayers opt for professional services to submit their tax returns every year. That makes sense because everyone isn’t good at doing taxes, and you need them to be done accurately if you want your finances to be in order. So if you haven’t prepared yet for the tax season, it is about time that you start preparing. With the year ending and the holiday season approaching, it will get quite hectic these days. So preparing beforehand can come in handy and save you the last-minute troubles.

In this article today, we are going to be looking at steps that will help you prepare for the tax season, especially if you are planning on hiring a professional to help you out. So let us go ahead and jump right into the detail.

Choose a Preparer

The first thing you need to do is find yourself a good preparer and an authorized one. Never go with the first person that pops up in the search results. Please do some research, ask your friends and family for referrals, and make sure that the hiring person has a Preparer Tax Identification Number (PTIN), which suggests that they legally have the authority to prepare federal tax returns. Look for credentials, past work experiences, testimonials from previous clients, and their history on the IRS directory. If you can’t find one, you can always look for some on the IRS directory based on your location. You will, for sure, find some professional ones.

Schedule an Appointment

The more you delay your meeting with the preparer, the later you will be able to file your return, which will lower your chances of a low tax bill. Once you have finalized the preparer you wish to go with, make sure to set up a meeting as soon as possible to discuss the terms. The sooner, the better, as it will prevent you from filling for an extension and help you get your refund quicker than you anticipated if you believe that you will get any.

Keeping organized through the year is key to avoiding the flustered last minute panic.

Gather Your Documents

It is time that you start gathering all your documents. By the end of January, your employer must have provided you with all the documents you need to start preparing for taxes. But other than that, you also need documents from banks, mortgage lenders, businesses, and other financial institutes to gather proof for your income and expenditure. Make sure that the documents presented by third parties have the same information as your personal records. If not, then one of you might have made a mistake. It would help if you got it handled before the due date.

Round-Up Your Receipts

In case you wish to opt for deductions and claims, you need to round up your receipts. Every year, there is a standard deduction limit that each tax paper can claim. So the only way for you to accurately calculate is to round up all your receipts and itemize them accordingly to compare your total deductible amount with the deductible limit.

If you are doing your taxes on your own, you need to look for specific costs such as medical bills, charitable contributions, educational expenses, and other deductible costs. But remember, all these come with limits, which you need to keep in mind when doing your taxes.

If your income source comes from your business, you need to share your books and records with your preparer. But make sure to round up everything and have it all in place, so it doesn’t take the professional much time to sort your returns. Remember, the more time he has to spend on your returns, the more it will cost you. So doing some prep work beforehand can help you save a lot of money.

List Your Personal Information

Apart from your financial records, the preparer is also going to need some of your personal information. Yes, we all know our social security numbers, but we don’t know our dependents’ social security numbers. You might need to write them all in one place along with all their other information for return purposes.

Other than that, you need information such as property addresses, dates for sale and purchase of the real estate, amounts paid for bigger purchases, and more. All these minor details are important for taxation purposes, and having them beforehand in one place can help save a lot of your time. Since you will need them, so why not have them jotted down in a diary for your tax preparer.

Decide Whether to File for an Extension

If you believe that you need more time to get all the documents in place, you should file for the extension before the deadline. Remember that even with the extension, you will be required to pay the estimated amount at the standard deadline; otherwise, you will be charged interest or might have to face penalties.

Consult with your tax preparer if an extension is necessary or not. A professional will be able to guide you better on that. It is best to prevent it as much as possible. Request for it only if you believe it is necessary and you can’t meet the deadline based on your circumstances.

The Bottom Line

Whether you are planning on doing your own taxes or you wish to hire a professional to do the job for you, having your books and record all aligned up before time can save you from the hassle and unexpected circumstances that might force you to file for an extension. The earlier you start, the better it is. You will have more time on your hands, and the sooner you get done with it, the sooner you will be able to claim the refund.

   

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Felicity Nicole
Felicity Nicole
Owner , She Is You
I’m Felicity Nicole, and I was born and raised in the Chicagoland area. A tomboy at heart, I can be found hair up, favorite sweatshirt on, cooking up something yummy for my family. I am remarried to a wonderful man who totally gets me (woohoo!)., It turns out God does give us second chances! I am now a stepmom to two adult children who are super beautiful and a nonstop blessing in my life. Watching my son play baseball is by far my greatest joy. I am a transformational coach and Reiki Practitioner on a mission to help women redesign their lives. This mission comes directly from my own personal experience with self-discovery. From an abusive marriage to a healthy, fulfilling relationship, through multiple careers and a lifetime of coaching the women in my own life, what I realized is that I have always had power and tenacity deep within me…I just needed to let it thrive again. My courage and determination to walk away into the unknown and redesign my own story is a shining example that where there’s a will there’s a way. On the lighter side, I like my pizza thick and layered in meat and cheese (remember, I’m from Chicago). I spent 22 years in the veterinary field, where I brought home WAY too many fur babies. And if I had one thing to bring with me to a desert island, it would be coffee.
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