Most Americans don’t get excited about tax season.
Given the amount of work that goes into taxes, it should be no surprise that Americans avoid it. Whether it’s collecting all the documents, filling out the forms, or sending money back; tax season is not fun.
That’s why we’re trying to make it simpler with five easy steps that you can take now.
1. Make Note of Key Dates
If you haven’t already, consider setting reminders of key filing dates on your phone’s alarm or calendar. You should also be setting reminders a month or so before the cut-off period. Doing this will give you plenty of time to fill out your forms or gather your documents.
If you set reminders but are still unable to meet the submission deadline, simply fill out Form 4868 which will give you a six-month extension on the filing. Keep in mind, a payment equal to your estimated owing will need to be sent when submitting this form but you will not incur any interest or penalties for being late.
2. Contribute Regularly
When it comes to saving, begin early to avoid last-minute panic and huge tax bills. Regularly contributing to a Roth or Traditional IRA account throughout the year adds up and can result in a huge credit. You can further eliminate the stress of having to remember to contribute by setting up automatic deposits. We suggest these deposits be for a predetermined smaller amount that can come out of your account on specific days each month.
3. Research Filing Changes
If you experienced a major lifestyle change (like becoming a parent or getting married), research what the change means for you and the people involved come tax season. For example, if you are co-parenting, you will need to speak with the other partner to ensure both parties are not claiming the child (if you live apart).
Although noting these changes can be simple on tax forms, your status can drastically impact how your taxes are done, and the amount you will be getting back. So be sure to start talking to the other parties early or you could be in for a surprise when you submit.
4. Gather Documents
As you receive tax paperwork throughout the year, it should all be moved to a single location. Tax software like QuickBooks can also be downloaded for free to help you as you receive things. This system will be able to save all of your paperwork in one location and can even automate reminders, payments, and uploads. Regardless of the method you’d like to use, every W-2, 1099, receipt and more should be in a single easy-to-find location.
5. Consider Your Filing Method
If you haven’t put any thought into how you will be doing your taxes this year, you might want to begin now. That’s because every filing method will have a different process and timeline. For those choosing to file themselves, the process might take longer given the amount of time you will need to prepare, gather and submit it. Whereas those who go to a professional save time but need to account for the additional cost of hiring help.
Ultimately, if you struggle to complete your taxes each year it could be worth it to hire a professional, like us at A.P Accounting & Tax Services. We can head through your accounts to ensure your filing is accurate and on time. Give us a call at 407-328-5001 to see how we can help.
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