Year-round tax planning can save you time and energy.

 

  It should come as no surprise that taxes are due each year. But, every tax season there are tons of people unprepared to file. These last-minute submissions often cause an increase in stress, errors, missed deadlines, added fees, and interest that could have been avoided.

At A.P Accounting & Tax Services, we understand how daunting taxes can be. That’s why we encourage year-round preparation and have outlined four reasons why you should prepare this way below.


1. To Avoid Owing More

 

Waiting to the last minute can leave you with a hefty tax bill. This is often the case for those that haven’t had the correct amount deducted from their paycheck. If deductions were not correct throughout the year, and money was not set aside, the IRS can come back at tax time for the missing fees

A large tax bill is also common for those that work freelance or on a contract basis. Typically, tax is not deducted, or the proper amount is not accounted for by these workers.

So, to avoid a nasty surprise, it’s good practice to review pay throughout the year. This will ensure the deductions are correct, and if not, it gives enough time to set aside the owed sum.


2. To Prepare for Quarterly Payments 

 

Small business owners, freelancers, and those who work on a contract basis definitely should prepare for taxes throughout the year. That’s because these types of workers are required to pay quarterly estimated taxes, regardless if it is the main source of income or not. 

 

Quarterly taxes are meant to make up for the fact that tax is not being taken out of a paycheck. And, if this bill is not paid on a quarterly basis, it could mean a huge bill come tax season. For this reason, it’s important to be as accurate as possible when gauging how much is owed. 

 

To determine the amount, we recommend speaking with a professional. Someone like us at AP Accounting & Tax Services would be able to monitor the income and account for expenses and deductions in order to determine how much should be paid. In turn, alleviating the stress comes at the end of the year. 


3. To Avoid a Large Return

 

Although a large return may sound like a good outcome, this money could have been spent on better things. For example, it could have been placed into a savings account and earned interest instead of it being lost for the year. Of course, the bigger the return, the greater the loss will be. So, be sure to accurately prepare throughout the year to avoid overpaying the IRS. 


4. To Plan for Better Tax Breaks 

 

Planning for taxes throughout the year means you’ll be better able to prepare and take advantage of tax breaks. This is especially true if you contribute to an HSA, IRA, or 401(k) account. The majority of people we see that contribute throughout the year (with small but consistent payments) typically contribute more compared to those that don’t. Those that choose to wait often don’t have a large lump sum available which is why it’s best to prepare throughout the year to take advantage of these tax benefits at year-end.

Ultimately, if you’re struggling to manage your tax paperwork and are struggling to figure out how much you owe, consider getting help. Our staff is able to review your account throughout the entire year. That way, this tax season is guaranteed to be a success. So, give us a call at 407-328-5001 for help today.

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