Getting organized eliminates stress and makes the process so much quicker. When prepping for taxes, customize the tax system to your own needs.
Ensure your organization system contains three simple items: First, make sure you’ve made copies of your previous tax returns. Second, keep all receipts of deductible expenses.
Lastly, keep all correspondence with any tax professionals for your records in case you find yourself facing any problems. Make sure you check out the CGS Podcast Interview with Tax Influencer Duke Loves Taxes!
File Early
The early bird gets the worm. It’s important to file your taxes early so you don’t rush at the last minute and make unnecessary mistakes. The deadline to file personal returns is April 15th, but you can file early. If you file early, you will get a faster return!
Businesses must file their returns by March 15th. Filing early also eliminates the need for an extension when doing your taxes; however, the IRS does allow filers to extend the tax due date to October 15th.
Create a List of Write-offs
Create a single list of write-offs that for your return. Keep note of all applicable receipts, bills of sale or other paperwork relating to deductible expenses that you may have had throughout the year.
A trick to help with writing things off is by keeping notes on the back of receipts. Write down why specific purchases or items should be considered tax write-offs. Keeping a small planner that records your purchases may also help.
That way, if push comes to shove and the IRS wants to make an audit, you can provide them with receipts.
Determine Your Deductions
If you are an independent contractor, the ongoing list of potential deductions can be long. Most taxpayers wait last minute during tax season to learn which deductions they can take.
Understanding which work related items can be deducted from your return can make a large difference in the amount of tax due. For regular employees, the standard deduction is the most common.
However, in addition to standard deductions, there are many other useful deductions, including home mortgage interest, state and local tax and charitable contributions. TurboTax is a great source for figuring out what deductions apply to you.
Make Donations Ahead of Time
If you forgot to donate last year, then this is a useful tip to keep in mind for this year. When you procrastinate until the end of a year, you risk the chance of having to find and chase down volunteer workers and charity administrators.
Keep note of all donations made throughout the year. Donations may include cash given to churches or charitable organizations, as well as clothing and other items given to Goodwill or Salvation Army.
A good way of keeping track of all your donations is keeping receipts and placing them in a folder or planner designated for your taxes.
Find a Tax Professional
Although it’s likely that you can and will fill out your own tax forms online, it’s also possible to hire a professional tax advisor to go over your work. It’s important to do your research when looking for a tax advisor. Don’t settle for the first person you find!
It’s always a good idea to run your tax papers by someone who has some knowledge of tax laws. Read Do You Need a CPA? for tips on moving forward with an accountant.
Related: 6 Life Events that Trigger Taxes
How do you stay organized and file your taxes as soon as you can? Please comment below if you have any questions or experiences to share with the community about prepping or filing taxes! Let’s tackle this tax season together!
2 thoughts on “Prepping for Taxes”
This year I made sure to file early and I held on to a few receipts to be filed for tax deductions. My return was bigger and I recieved it within 2 weeks.
Good idea! Who did you file with?