Getting ready for tax time can be stressful, but it doesn’t have to be if you take the time to get organized right at the beginning of the year. There is a variety of documentation that will need to be collected and information that should be tracked as you go, but in order to maximize your time with your tax professional, such as TH Tax Services in Panorama City, CA you need to get organized and stay that way before prep time.
Here are a few tips to make sure that you maximize the time you spend with your tax professional or accountant by through your efforts during the rest of the year.
Get the Information Organized
In order for your accountant to know which deductions you are eligible for, or to determine your if you qualify for various tax credits, there is documentation that you need to provide. Therefore, it is important to make sure that you keep files with receipts for your business, medical expenses and charitable donations, just to name a few.
Bring to your appointment a list of all your deductible costs organized by category. The accountant might not need the actual receipts for most expenses, although you should keep them filed away for at least seven years, per the IRS. If you have more complex transactions, or those that are out of the normal sphere, bring those receipts and documentation in to assist your accountant in determining your eligibility for any additional deductions.
Strategize for the New Year
For many accountants and tax professionals, the closer to filing day, the less time they have for serious consultations. Therefore, be sure to book your appointment early in the season. This can benefit you in a few ways. One, if you find out that you have an outstanding tax liability, then you will have a few weeks to plan out how to pay the outstanding taxes.
Another benefit is that you will have time to discuss tax planning for the upcoming year, including any potential purchases of property or vehicles. This can help you to strategize for the upcoming tax year regarding possible deductions and credits.
However, if your 1099s have a history of being amended, then you want to track which ones and be on the lookout for the amended ones in February and March to add to your files.
Tax Worksheet or Questionnaire
Many accountants can provide a tax organizer worksheet that can assist you in getting organized for your appointment, but it can be a great way to get organized for the upcoming year as well. This worksheet typically covers a variety of areas where you might have seen changes throughout the year, including purchasing real estate or selling off a vacation home. Below are a few items to be sure and include in your tax preparations.
Also, be sure that you have your accurate cost basis for any investments. While you should receive a 1099-B, if an investment is a gift, then you want to do the legwork early, to avoid a time crunch at tax time.
Miscellaneous Deductions
If you did proper tax planning last year, then you should already have an idea what to look for as you gather information or tracking various expenses. But it is still worth another look to be sure you didn’t miss anything prior to sitting down with your accountant or tax professional. There could be that additional expense that could be deductible that was not added to your folder or envelope.
During your appointment, be sure to tell your accountant about any major life changes, as this could mean additional savings in terms of a lower tax liability. However, you will want to be sure to have as much documentation with you about these changes.
Finally, it is important to remember that being organized and prepared will save you time and money, as your tax professional or accountant can really focus on your filing, versus attempting to organize your paperwork. Call or click here to connect with one of the tax professionals at TH Tax Services, Panorama City CA, regarding your tax strategy for the upcoming year!
