Filing taxes is a complicated process; the laws that guide the process are complex and often contradictory, there are lots of refunds and deductions to be claimed, and the government allows little margin for error while filing returns and claiming deductions. It is therefore not surprising that 60% of individuals consult tax professionals to file their returns for them.
As the April 15 deadline approaches, here are some things to do to make filing your taxes as stress-free as possible.
Get A Tax Preparer
According to Glenn Sandler, CPA, the founder of G.I. Tax Service, the longer you take before securing the services of a tax preparer, the more complicated the process will be and the more money you’ll end up paying. April 15 is not so far away anymore, and quality tax experts are already getting booked up. Get a tax preparer quickly and get your filing process started.
Please ensure that the preparer you choose has the Preparer Tax Identification Number (PTIN) that is required of all federal income tax return preparers.
Prepare Your Receipts
By employing a tax preparer, you get advice on ways to lower your tax bill and maximize the deductions available to you. You may opt for the standard deduction or choose to itemize your deductions; depending on which option offers you a more significant write-off. However, you can’t determine this until you itemize, and you need your receipts to do this. Also, should the IRS decide to audit you, your receipts will serve as evidence of your expenses.
Donations made to charitable organizations are also tax-deductible. Should you choose to itemize, you will need a written acknowledgment from the organization for donations above $250.
Provide Your Tax Returns For The Previous Year
If you are filing with a new preparer, you will need to provide them with a copy of your 2017 returns. This will make your returns this year easier to file, and the easier the process, the less you’d have to pay. Also, if you made contributions to some charities last year, it is likely that you did so again this year. Find the receipts and claim your deduction.
Adjust Your Withholding
If you received a big refund on your last year returns, that could be a sign that your employer is withholding too much of your income. Talk to your payroll manager and get them to reduce the withholding so that you can have more money to spend during the year. “If you prefer to get those big refund checks from the IRS, however, there is no need to adjust your withholdings,” says Glenn Sandler.
Decide What To Do With Your Refund
If you are expecting a refund, decide on what to do with it. Do you want it sent into your savings/checking account, sent directly to you as a check, or used to offset your tax bill for next year?
You could also contribute your refund to your 401(k), IRA, education savings account (ESA), or health savings account (HSA). Please note that if contributed to your 401(k), your HAS, or some traditional IRAs, the refund is deductible from your next tax returns.
As long as you prepare adequately and take the right steps, filing your tax returns do not have to be overly difficult. According to the IRS, approx. 36% of taxpayers did not start filing their 2016 returns until April 2017.
Starting early will save you money and give you enough time to gather all the required documents. Contact a G.I. Tax Service professional today and get the ball rolling.
If you are interested in even more business-related articles and information from us here at Bit Rebels then we have a lot to choose from.