The tax season is officially here. If you have not already, now is the time to get prepared. Proper planning helps the processes go more smoothly and may reduce the risk of costly errors. Check out the tips below and prepare to tackle this tax season with confidence.
Gather All of Your Forms
Beginning in January, you likely started to receive the forms you need to properly complete your tax return. If you are expecting a large refund, you will want to make a list so you do not forget anything that could affect it. Once you have received your documents, give them a scan to make sure they are correct and contact the sender if there are any discrepancies. Remember, even a simple misspelling can cause a flag with your tax return. Inspect all of your documents carefully.
Some of the forms you will need to look out for include:
• W-2s from your job
• SSA-1099 for Social Security benefits
• 1099s for additional income, interest, gains, and losses
• 1095-A for government marketplace health coverage
• 1098s for reporting interest and tuition payments
• W-2Gs for any gambling winnings
• Schedule K-1s for company ownership
Round Up Your Receipts
If you have your own business or plan on itemizing your deductions, you will need to record expenses so that you can take advantage of any available write-offs. Gather all the receipts for business expenses, medical expenses, and other expenses that can be listed on your Schedule A or Schedule C. Receipts can be physical receipts or bank and credit card statements that show payments for these items. Once gathered, organize them by type, so they are easy to find when you begin filing.
Acquire Records of All Charitable Contributions
Throughout the year, you may have made donations to a tax-exempt organization. These donations can provide you with a charitable contribution write-off. Traditionally, this could only be done if you choose to itemize your deduction. However, because of the CARES Act, filers who choose a standard deduction may be able eligible to write-off up to $300 in charitable contributions.1
Other donation types will still require an itemized deduction and documentation. Most organizations, from churches to fundraisers, can provide a record of your tax-deductible contributions.
Create a List of All Personal Information
While you likely know your Social Security number by heart, you will want to jot down the Social Security numbers of any dependents you wish to claim. That way, it is easy to access and you can be sure it is accurate. Also, make a list of addresses for any properties you own as well as the dates on which they were bought or sold.
Get a Copy of Last Year’s Tax Return
If you are using the same preparer as the previous year, they should have a copy of your tax return. If not, find your old copy and have it ready with your other tax items. Being able to reference your previous return can help you see what you filed last year, so you do not overlook something this year.
Consult a Tax Professional
One thing most of us can agree on is that tax law gets more complicated year over year, not easier. Hiring an accountant will save you time, money, and energy. Their knowledge of tax laws and codes allows them to help you maximize your deductions and your refund should you receive one or potentially reduce the amount of taxes you owe.
If you own a business, property, or have multiple income streams, hiring a tax professional is a must.
Do not let tax preparation leave you feeling overwhelmed. Enjoy less stress and a smoother process by preparing everything you need for filing this tax season.
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