It’s very prudent for a person or business to prepare for the tax season. Normally this entails organizing all the paperwork in an orderly manner. This will ensure that the CPA does not a lot of time to prepare taxes, which then results in the person not incurring unnecessary costs. Preparing also ensures that the person gets all the benefits and deductions that they are entitled to.
There are steps that one can take to be ready for the tax season.
There are tax documents that are related to the income that one has received throughout the year. This is regardless whether one has worked for one employer or a number of employers. Income includes all proceeds from salaries, bonuses, payments as a result of disability among many others. One should account for all the income they have received for the previous year.
Also, one should account for income or loss that is as a result of investments. Income from investments can include interest earned, sale or dividends from stock and royalties. All these information can be got from the brokerage firm that one is using or from the bank.
2.Collect your information on returns
By the time the tax season arrives, one should have all the information they need. The information that one puts ion the forms should match the one that is in the records of the individual.
3.Collect all the receipts that are required
If a person chooses not to claim the standard deduction, one can choose to itemize the deductions. The choice is advised by which option gives the best write off. If one chooses to itemize, they should have all the receipts that have been in use throughout the year. The expenses that one can itemize may include but not limited to medical costs not covered by insurance, taxes related to properties or other expenses.
4. Keep your financial records in order
A person should make sure that their financial records are up to date. The records should be the ones that will be needed during filing of returns. One can use the latest technology in accounting that is available online.
5. Gather records for money donated to charity
One can claim a write off when they have made contributions to charity. They, however, will require having specific records to make such a claim.
6.Have a list of personal information that is required
Personal information can include social security numbers to the number of dependents that one has. It can also include addresses and information about the property that is either sold or bought.
7. Determine whether you need more time to file returns
There are some factors that are beyond a person that would push one to ask for an extension. One should request for the extension using official channels to avoid penalties.
8.Refer to the previous year’s return
This serves as a guide in filling the current year returns. It helps a person on the items to concentrate on and those that they should not overlook.