Tips for Making Sure You’re Always Prepared for Tax Season

Tax season will be here before you know it and being prepared will make filing your taxes easier. If you don’t file on time, you will have added penalties to your account.

Whether your taxes or easy or complex makes no difference, preparation is critical. Here are some tips to ensure you’re prepared for your taxes.

Know the Tax Laws

Each year the tax laws change, and the new regulations can affect your bottom line.

While the laws may not be as important to some as others, it’s essential to keep up to date on any changes that might affect your tax situation.

Utilize Any Tax Credits

Tax credits are another thing that’s constantly changing. There are many credits currently available.

If you know that you need a new HVAC system and there’s a tax credit for it, utilizing these credits can help you with your bottom line.

Make sure to stay informed on credits and their changing limits. For instance, this year, the Child Tax Credit was increased, which can significantly impact your return.

Create an Organized Filing System

A filing system is imperative, primarily if you use the home office deduction for a home-based business.

The chances of being audited are slim, but when you use certain deductions on your taxes, it puts you at a higher risk of being audited.

Did you know that 52 percent of small businesses have a dedicated home office space? In an audit, you may need tax attorneys to help you sort through all the red tape and keep you out of trouble.

Keep Last Year’s Taxes Handy

When you file your taxes, you don’t necessarily need to keep a paper copy, but you do need to have access to a file.

You should have at least a digital copy at your disposal so that you can see your adjusted income as well as filing status and the number of dependents.

Make Changes to Filing Status

Things are constantly changing with tax season filing statuses and the number of dependents. Any significant life changes, like children turning 18 or getting a divorce, will affect your return.

Plan for these adjustments early by changing your W-9 with your employer. Your withholding will be different with each change, and it can affect how much you owe or will be refunded.

Dealing with taxes is never easy. It’s always best to have a professional handle things so that if there’s an audit, you’re prepared.

Even if you handle your tax returns yourself or with an online service, you need organized documentation to make the job much easier.

 

Tags: tax credits, Tax Laws, Tax Preparing, Tax Season

Category: Taxes