It’s a good idea to begin preparing for tax season as early as possible so that when the deadline hits, you’re ready to go. It doesn’t matter if you’re new to the process or you’ve done it a few times, early tax preparation is always advisable. Read on to see the four ways in which you can prepare for tax season.
Tax season comes with a lot of paperwork to do, so if you can get ahead of it, the better it will be for you. From your personal information including social security numbers and birth dates of yourself as well as any dependents that you have, it’s crucial to have this information ready. Other documents and information that you will need include child care expenses, records of property taxes that you’ve paid, the tax returns from the previous year, and tax forms like the W-2 which show how much income you’ve earned.
As far as tax preparation goes, you also need to decide how you want to file your taxes. The options that you have include filing them on your own, using software to help you, or even enlisting the help of an accountant. You will likely need to hire a professional if you’ve gone through a major life change like a marriage, or you’ve become a parent.
With income adjustments, you can actually lower the taxes that you’re required to pay. Some of the income adjustments that you may get include expenses from moving, interest on student loans, mortgage points, and child dependent care tax credit. These will help you pay a lower amount so it’s important to get them outlined early enough.
Finally, there are a number of tax deductions and credits that you may be eligible to claim. Reviewing them early on allows you to find out which ones you can claim. Some of these may need you to fill out additional forms and this is why you should know about them early enough.
According to the National Taxpayer Advocate, it’s estimated that small businesses spend about 2.5 billion hours every single year on preparing tax returns or responding to inquiries by the IRS about their returns. With proper tax preparation, you can cut down drastically on this time. If you’re looking for CPA’s you can trust, contact Brown Chism & Thompson today!
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