Are you properly prepared for the tax preparation process?
It’s tax season, whether we like it or not. If you haven’t thought about preparation, you’ll feel the pain when you try to rally for last-minute filing. Can you get a jump on the tax preparation process? You bet you can. Here’s how, whether you’re filing your taxes as an individual or a small business.
Gather Your Records and Documents
For both individual tax returns and business returns, it’s important to have all your financial records and documents ready and available when you file. You don’t want to get started on the process only to find that you’re missing something vital.
Gather your W-2s, 1099s, receipts, and documentation for expenses and deductions. For your personal taxes as well as your business taxes, you should have all your financial information organized and updated throughout the year. That makes this step of preparation as simple and stress-free as possible. Hiring an accountant or bookkeeper can help you start this process now so you’re ready for the next tax filing.
Make Sure You Have the Right Forms
You can get any and all forms you need for your individual tax preparation at the IRS.gov website. If you’re unsure, now is a good time to consult with a tax professional. This way, you can make sure you’ve got the right forms for your personal taxes, but also, and even more importantly, for your business taxes.
Verify Your Deductions
Verifying your deductions can help you save on your personal taxes. But it’s really critical to get them right for your business taxes. Now is the time to decide between itemized deductions or standard deductions. Itemize your deductions to get credit for everything you’ve spent money on. That includes all your charitable contributions and one-off donations. Research how any major life events or investments could entitle you to big deductions. Consult your accountant for your business expenses to be sure you’re only claiming legitimate deductions. That way, you don’t throw up a red flag for an audit. Plan for the future by knowing how to maximize your end-of-year deductions. A good accountant can advise you now, so you’re ready next time.
Update All Your Information
For your individual tax information, this can mean revising your W-4. You should do this every year. You want it to accurately reflect any changes in your life or circumstances. That includes changes in your marital status, number of children, or any other change in your dependents. For your business tax information, this means making sure the information for your employees and any independent contractors you have on your payroll is correct. You will need to submit 1099 forms as well as provide W-2s for your staff, where applicable.
Know When to File an Extension
In the case that you are not fully prepared in time to file your taxes before the due date, you can consider filing an extension. One of the benefits of filing an extension is that it buys you more time to make sure you do your taxes right. The other benefit is that, by waiting until later in the year, tax professionals are going to be more readily available than they are during tax season.
Hire a Professional Before the Last Minute
If you are not organized ahead of time or are struggling to find the right documentation, forms, deductions, or any other aspect of your tax preparation, it’s time to hire a professional. If you own a business, it’s also a good time to hire a professional to manage and maintain your financial information year-round, so you’re ready next time taxes are due.
No matter who you are or what you do, you can’t get around taxes. Click or call 678-990-0924 for a free consultation to learn how to make this year’s tax preparation process the easiest it’s ever been.