11 Tips To Help You Prepare For Tax Season

11 Tips To Help You Prepare For Tax Season

Are you excited and prepared for the 2017 Tax Season? Or are you confused and overwhelmed? Tax Season happens every year around the same time. The best way to make sure it goes as smooth as possible is to ALWAYS be prepared, Mentally and Physically. Some may think tax season is a breeze and others may have more complicated factors that cause them stress and frustration. 

According to a NerdWallet survey of 1,015 people across the U.S. in early February 2015, most American adults get an “F” in understanding income tax basics. Respondents scored on average 51% in a 10-question quiz on tax basics related to such personal finance issues as retirement, college savings and health care.

No matter what your situation is, I am here to help those who want to get back on track with being prepared for tax season EVERY year. You should always prepare for tax season before the tax season arrives. Planning ahead always puts you several steps ahead. Scrambling around at the last minute is a hassle. Don't be a Hassler! Be productive, smart and detailed with your personal and business tax preparations. Those are the KEYS to Tax Success! 

11 tips TO HELP YOU PREPARE FOR TAX Season:

  1. Keep track of important documentation! Such as banks statements, receipts, emails, W-2, 1099, lease agreements, contract agreements, etc. If you choose to keep hard copies, purchase file folders, large envelopes and a box designated for tax documents only. If you choose to have digital files, do the same thing. Create a digital file designated for tax documents only. This makes it easier when it's time to present all of your documentation to file your returns. You can also create a check list to make sure all items are in your files and ready to go. 
  2. Understand how new events may change affect your tax year! Did you buy a new car or a house? Did you get married? Did you have a baby? Did you start a new business? Did you donate money or materials to an organization or charity? Did you have work related travel expenses? Make sure you have the documentation to support these new events.
  3. Decide to hire a tax professional or use tax software to prepare your own returns! It's a great idea to do your taxes yourself because you can learn the tax filing process from start to finish and you could save money by not having to pay a professional. Some may not have time or the interest in preparing their own taxes. In this case, you could hire a tax professional. This is beneficial because you are working with someone who is an expert in this field. Even if you prepared your own taxes, you could still use a tax professional to lookover your return to ensure it was done accurately. When choosing a tax professional, make sure it's someone who you trust and has a proven track record of providing timely and accurate results from other clients. Also, make sure your tax professional is familiar with all aspects of your industry.
  4. Set a tax filing budget! Know the cost of your tax filing fees. Set that money aside or save a small amount each month until you have saved the total amount needed during tax season. This way, you wont have to neglect another expense to pay for your tax filing expenses.
  5. Research and ask a lot of questions! Know your tax situation and research any and everything you possibly can. If you are filling head of household, with one job paid as W-2, research to know and understand what your requirements are and what deductions and refunds you may be entitled too. Same goes for if you are married, with children, have a job paid as W-2, another job as 1099, and also run your own business, you have to research to know and understand your requirements and what deductions and refunds you may be entitled to receive.
  6. Tax advantage of free tax filing options! If your budget is tight and you can't afford to pay a tax professional, consider free tax help. Check out www.unitedway.org for free tax help in your area. These are volunteers who are trained by the IRS to help those in need of tax preparation services.
  7. Know how much taxes you owe! Even if you're not exactly sure, at least calculate an estimate and save that money throughout the year. If you are contractor paid as 1099 or you own your own business, it's up to you to set that money aside for tax season. Whereas being paid as W-2, you have taxes taken out for you before you see it each payday. Not having your tax obligations taken out in advance will require you to be disciplined and force you to make sure you set enough aside to cover the amount of taxes you owe. Saving too much is better than not saving enough.
  8. Use your refund towards your goals! Do you need to pay off debt? Save more money? Invest? Purchase or new car? Pay your monthly bills in advance for the next 1-2 months? Whatever it is, make sure you are smart and use your refund towards something productive. Yes, it's ok to have fun with your money, but not before you take care of your financial business first. You don't want months to pass by then you're wishing you would have spent it wisely. TODAY, make a plan for your tax refund before it hits your bank account. 
  9. Don't wait until the last minute! The last day to file is Tuesday April 17, 2018. Prepare now. You have two months and twelve days to get it done. I do understand there are circumstances where a filing extension is needed, but why extend when you can get prepared and get it over with now. Do what is best for you and your situation.
  10. Check for errors! Once your return is filed, always check for errors before officially submitting it to the IRS. You may need to double and triple check to be sure nothing was missed.
  11. Have no fear! Taxes doesn't always have to be frustrating and overwhelming. If you follow the tips above, you will have a jumpstart to having a successful tax season every year. Don't just hope you get it together at the last minute. Get it together now. Get prepared, ask lots of questions, and know the specific details of your financial situation. The more prepared you are, the less stress and worry you will have. Be happy, peaceful and confident this tax season!

Need more tax tips? Check out the IRS website at www.irs.gov. Need help finding a tax professional in your area? Check out Dave Ramsey's Endorsed Local Providers at ELP.