Tax season is here and with it, the arduous task of preparing to file our taxes. But it doesn’t have to be that way. With a little planning and ingenuity, tax preparation can be a breeze. Don’t believe us? Check out today’s blog post, where we offer 4 tax tips for easy filing.
Tips for Easy Tax Preparation
Whether you are a small business owner, filing jointly, or are an individual filer, as the tax season gets into full swing, you may find yourself rushing to prepare your tax documentation. Not only can this be extremely stressful and time consuming, it can also be very costly, as lost paperwork and sloppily prepared taxes can lead to a heavy tax bill!
To avoid unnecessary tax fees and liabilities, follow the simple tax prep tips listed below.
Stay Organized Throughout the Year
The number one tip we (or any tax professional worth their salt), can give you is this: take a few minutes out of each day to organize your tax paperwork. This is a practice you should get in the habit of today, and follow-up on every single day of the year.
Setting up a system is key to your success. You can choose to store your receipts and relevant documents in labeled file folders, or, better yet, create file folders on your computer (named for each type of tax document) and scan them in to your PC. Most tax professionals allow digital submission of documents, and your high level of organization will earn you extra brownie points!
Using this method, you are less likely to lose receipts and financial statements, and, in turn, less likely to miss out on important tax breaks and deductions.
Know Your Deductions
Just as important as saving and organizing documents year long, knowing what you can deduct (and what you can’t) will also help make tax preparation easier. Computers, office equipment, and even cell phones are typical deductions, as are travel expenses, entertainment (when trying to land a new client), and even meals (a percentage of them) when you are conducting business.
Some business owners and filers tend to try and take advantage of deductions to reduce tax liabilities, but know that the IRS are well aware of this tactic and have systems in place to avoid deduction abuse. Bottom line: make sure to document any write-offs and make sure that they are, in fact, business related.
Hire a Tax Professional
At the end of the day, hiring a tax professional, such as a certified public accountant (CPA) is a sure-fire way to make filing a lot easier – and is smart business to boot. There are so many tax laws and changes to the tax code each year, that it can be a full-time job just trying to keep up with them. Fortunately, there are individual whose job is to do just that!
Aside from making filing taxes easier (you will still need to provide paperwork, so see tip #1) and saving you money in the long-run, a good tax preparer will also offer you financial advice that can serve you well next year, and, indeed, throughout the course of your life.