With an April 15 tax deadline just around the corner, getting here sooner than we all want or expect it to, last minute filers and even those individuals and businesses who begin to prepare their tax forms at the beginning of the season will find that they are plagued with stress and discontentment with the filing process. To avoid ripping your hair out, follow these five rules for filing your taxes, stress free:
Rule One: Get and stay organized – Whether you begin to prepare your taxes at the beginning of the season or two days before; or you hire a tax preparer, such as CARMEN GARCIA, getting and staying organized is the first key to filing your taxes, minus the stress. To do this, get all your financial documents collected through the year and organize them. Keep in mind that you must begin thinking about your taxes at the beginning of the tax year, instead of at the end.
By doing this, you ensure that you have everything in order when it is time to file. Keeping your mass of financial records organized is a sure-fire way to report everything, not forgetting anything, which could set you up for an IRS audit.
The best way to keep track of everything you will need is to use a tax checklist, or better yet, use last year’s tax return and document all the sources of income you reported. Once you have a list of all income sources, get all documents, such as W-2 interest statements and 1099s that represent each source of income.
If you made new investments and income during the previous year, remember to include that as well.
As an attempt to stay organized, make use of your computer and prepare a folder and add all tax statements received online from mutual funds, brokers, and banks.
Rule Two: Use all work related opportunities to try and lower your taxes – the federal tax code for self-employed individuals is put in place to allow opportunities for claiming deductions and tax credits. Set the time aside to track all these deductions and credit down because it will help to reduce your taxes significantly.
If you are self-employed, think about funding a Simplified Employee Pension Individual Retirement Account, SEP IRA for future tax references. As a self-employed individual under the age of 50, you are allowed to invest up to $6,000 to a traditional IRA, helping you to avoid paying taxes on it, and $7,000, in the same respects, if older than 50.
If a SEP IRA is in the making, consult a tax preparer such as CARMEN GARCIA, to ensure that you are on the right track and following the rules exactly.
For those individuals who operate side businesses, consult your financial advisor to determine if you are in the right to write off any cost such as home office deductions. Be careful what you write as a deduction and ensure that it will be seen as a business instead of a hobby by the IRS.
Rule Three: Review all returns carefully – Check and recheck your tax return before sending it off to avoid IRS red flags. The IRS will disallow any returns made for as little as $1 being off with the taxes you filed, so be careful of the information you provide. To avoid such red flags, using the services of a professional tax preparer will help to eliminate such discrepancies.
Rule 4: Hire someone to help you – If you are not sure and if there is something that confuses you, do not hesitate, hire a professional to help you; prevention is always better than a cure. Therefore, CARMEN GARCIA will listen to what you have to say and file the appropriate forms, getting you the most sufficient returns.
Rule 5: Begin preparing for future tax seasons – As was mentioned before, the best way to stay organized is to prepare for your taxes at the beginning of each tax year or at the end of the current tax season. By thinking smarter and keeping your documents organized starting at the beginning of the tax year; you will be able to properly and effectively file your taxes without all the hassle and stress.
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