With the new year comes yet another tax season. Some people jump for joy this time of year, anticipating large tax returns to help purchase that new toy or pay off that debt. But for most taxpayers, the new tax season brings nothing but confusion and anxiety. However, it doesn’t have to be stressful. Preparing yourself for this tax season with these easy tips will make this tax season your most enjoyable and pain-free yet.
Collect All Tax Forms
In order to make your taxes as simple as possible, you should begin by creating a checklist of all the tax forms you expect to receive from your employers. If your taxes are simple and you only have one employer, you may only require a W-2 or 1040EZ to begin your tax return. However, most of us aren’t so lucky to have such a simple tax life.
If you’re one of the unlucky tax preparers who has multiple W-2s and 1099s, make a list of all forms you should receive and designate a safe and secure location in which to store them as you receive them from your employers. If the end of February rolls around and you still haven’t received all of your tax forms, contact the employers whom haven’t sent you your forms. Filing without all of your tax forms is a greater headache than you need to take on.
Choose a Filing Method
Whether you decide to use a tax accountant, bookkeeping service, an online tax preparation program, or to do your taxes by hand, choosing a filing method is an important decision you must make, and it cannot be taken lightly. While this isn’t a difficult step, it is important nonetheless. Many tax prep services allow you to file your Federal Return for free if you choose to do the electronic filing option.
Do Some Research
Once you’ve decide how you will file your taxes this year, start looking for any tax credits or deductions you might be eligible for. This is an especially important step if you choose to file your taxes on your own, as you don’t want to miss any credit or reduction that could reduce what you owe or increase the amount you’ll be refunded.
Let’s Get Organized!
If you have any itemized deductions or other business expenses you plan on claiming, you will need to get all of your receipts organized. Scanning all of your documents will provide you with a secure backup of all your files in the event you misplace any of them. If you’re finding yourself having difficulty separating your business and personal expenses, getting a dedicated credit card for your business expenditures will also help you keep everything in order. Plus, being able to fall back on your business credit card statements will make it easier for you to verify that you have all of the documentation to receive your deductions.
Schedule Time to File
Now, to the most boring element of tax season: actually filing your taxes. Some of us would rather have teeth pulled than file our taxes. It’s a long, arduous process that typically takes more time than anyone ever anticipates. Do yourself a favor and schedule an afternoon (when you won’t be working, of course) in which you will complete your taxes. You don’t want to be one of those rushing to file right before the deadline. The stresses of tax season are largely avoidable, so long as you prepare yourself for the task at hand. Spending an afternoon on your day off isn’t what you’d like to do with your time, but once you have your tax refund in hand, you’ll be glad you were so well-prepared to tackle your taxes.