We’re often asked when the best time of the year is to prepare for tax season. The truth is, if you have a good tax strategy in place, you should be preparing all year round.
Preparing for taxes doesn’t necessarily entail hours of work each week, but just a few minutes here and there. Here are a few tips on how you can prepare throughout the year so you are ready to go when tax season comes:
Save Tax Forms
One way to save yourself time and prevent headaches as tax season approaches is to have all of your tax forms and paperwork in one central place. We suggest that you designate one specific place, such as a file in a file cabinet or even a large manila envelope for all tax forms as they arrive in the mail. This will keep you from having to scramble to locate the forms or request duplicates for your accountant when the time comes.
Keep Track of Changes
Consider any major changes that may have taken place since you filed taxes last. Changes that can impact your personal taxes include marriage, divorce, having a child and moving to name a few. For your business, consider changes such as location changes, marketing expenses and employee related costs and taxes. The more information you have on hand, the easier your tax filing will go.
Do you currently contribute to an IRA or 401k? Contributions to retirement accounts can also impact your taxes significantly. Be sure you are keeping track of these contributions and have clear records ready to go. Whether you are doing your taxes on your own or with the help of an accountant, you’ll be glad you have these records at your fingertips when filing.
Who Will Handle Your Taxes?
Another thing you can do now to ensure you are prepared for tax season is to decide who will be filing your taxes. Will you do it yourself or will you seek the help of an accountant or other preparer? If you are going to file your taxes on your own, what tax software will you use? There are pros and cons to doing taxes yourself, but knowing in advance can help you be more prepared.
Take some time to think about any charitable contributions or business expenses that will count as deductions. Be sure to gather any and all receipts you may have for these types of contributions and have them on hand as you file your taxes. Knowing the amount of potential deductions can help you determine if you should itemize your taxes or not.
Need More Tips To Prepare For Tax Season?
Remember that Hacker Accounting is here to help when it comes to preparing and filing taxes. Give us a call at 602-375-5251.