While it isn’t near the tax season yet, this is still the right time for you to prepare for your tax return. If you do a little work every day, when it comes to the next tax season, you will find it much easier to complete your tax return. This will save you time and prevent you from missing out on revenue or savings because you are too busy completing your tax return.
Another benefit of thinking about your tax return now, is that you will be able to see available tax savings which will minimize your tax burden and put more money into your pocket or organization.
If you use an accountant or are looking to employ one, getting prepared now will make for a smoother relationship. The more effort you put into making their job easier, the better the service they can provide you. If you don’t help your accountant out, they might only just have enough time to file your return for you and you might miss out on something.
So what can you do to make your tax return easier to file when it comes to the 2017 tax season? Here are several ideas to help you.
1. Change Your Mentality
The first thing to do is to change how you think about your tax return. Most people don’t like completing their tax return and for some, it fills them with dread. However, it is an essential task, and there are benefits to looking positively on it.
If you fear or hate completing the form, you are more likely to rush it. This could mean that you are missing out on vital tax savings. You will also be more likely to delay the information sourcing or filling in of the documents. If you end up rushing the process over a couple of days, your productivity will be zero or just above, and your business will suffer. By doing a little bit every day, there will be less of an effect on your business.
2. Record Everything
This is such as an important task. You should record everything incoming and outgoing of the business. Determine the value, any taxes associated with them and the purpose of the transaction. This could all be kept on a spreadsheet or on an accounting piece of software that should make your filing much easier at the end of the tax year.
Also, keep paper copies and digital backups of everything you have. The biggest victims of cybercrime and data breaches are small businesses. Losing all that information wouldn’t just be a disaster for your time, it can be frustrating as well.
3. Get Organized
All the documentation you may need for your filing should be collected before you start completing your tax return. While we covered receipts above, you should also collect any incoming mail with the designation “tax document enclosed”. You should also look at gathering the items on this list, which is by no means complete;
• W-2 and 1099 forms.
• Mortgage interest (Form 1098), mortgage insurance and property tax information.
• Student loan interest information.
• Tuition and fees documentation.
• Cancelled checks that can demonstrate donations you claim.
• Any medical bills that exceed 10% of your income.
• Documentation of contributions to your retirement accounts.
• All receipts to document business expenses and deductible items.
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4. Get A Copy of The IRS Publication 17
You’ll never remember all the tax codes used. It is almost impossible, especially if you have other priorities. That is why you should make your life easier by downloading a copy of the IRS publication 17, otherwise known as Your Federal Income Tax. This document details the tax law and provides the general rules to follow when you are filing your tax return.
Detailed in the document you will also find:
• Who needs to file a tax return.
• Which tax forms you should use.
• When the return is due.
• How extensions work.
• A description of how tax deductions work and if you qualify for them.
• How to get support from the IRS.
The guide is 288 pages long, so you will need to get it early to ensure you have the time to read it and highlight the important sections for you.
5. Get The Right Tax Software
There is no better way to file your tax return than by using a software program. There are many excellent tax return software programs such as Tax Planner Pro. By getting access to these programs early on, you can learn how to use them comfortably and minimize mistakes when it comes to the tax season.
You can also then employ the ‘little a day’ methodology to the software program and ensure you aren’t rushing it later on. If mistakes are made, it is better to have longer to solve the issue than doing it last minute when the software owners might be overloaded with others having problems.
6. Use A Great Accountant
Filing your own tax return is a way to save you money, but it could be costing you more than you think with the loss of potential tax savings. The best people to help you determine whether or not you could make any additional savings on your tax returns are accountants. Not only can they free you up from the burden of the work, but they can also save you money and help you spot opportunities in your business.
The best accountants will also work proactively so when it comes to the tax return season; you know that everything has been taken care of and you can concentrate on your business.
The tax return season is not normally a fun-filled time for most. However, the emotional burden can be made a lot easier if you prepare for your next tax return early. By starting now and doing a little each day, you can ensure that when it comes to filing your tax return, it will take up less time. You might also be able to spot areas where tax savings can be made.
Alternatively, you can contact a good accountant and ask them to help you out.
Do you find the tax return season stressful? Do you want an easier way? Let us know in the comments below or contact Ragain Financial Services for advice and support.
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