Coming fresh off of your New Year celebrations means that April 15th is approaching. And while no one likes to think about it, tax season is quickly approaching. Tax Day 2019 is on Monday, April 15th and that means that it is time to start preparing to file.
Anyone who has prepared for tax time before knows the process seem like endless gathering and sorting of information. Unfortunately, there is no getting around that, but there are some steps to take now that can help you breeze through it more efficiently and with fewer headaches.
Getting organized is an important aspect of potentially minimizing your tax burden. As with the majority of things in life, being prepared is your key to success.
Today, we examine 3 simple and effective steps to properly preparing for tax season:
- Decide How to File
You really have two choices here: file your taxes yourself or hire someone to do it for you. Generally, hiring someone to do it for you costs you more than doing it on your own. This could be well worth it if, for example, you have a more complicated tax situation which could include filing trust tax returns or even itemizing your deductions. The IRS has a wonderful resource to help you hire an Enrolled Agent/CPA. However, it may make sense to use an online program if you are filing a more basic return and prefer a less expensive option.
- Get Familiar with Credits and Deductions
Did you pay for educational expenses last year? Adopt a child? Care for a child? Pay for medical expenses? There are tons of different Credits and Deductions that could be fair game for you to use. Get familiar with the Credits and Deductions you are entitled to so you pay your fair share of taxes but not more. Even if you plan on hiring someone to file your taxes for you, they might not know various areas of your life that could entitle you to a Credit or Deduction. It’s best to educate yourself.
- Start Collecting Documents
Of course you have to start collecting tax documents such as W-2’s and 1099’s. But also start collecting other documents that you might need to support claiming a Credit or Deduction. For example, if you have paid for educational expenses and intend on using the Lifetime Learning Tax Credit, you might want to start gathering your educational receipts and organizing them.
Tax season can be a very stressful time for Americans, but preparing in advance and remaining organized is the key to avoiding a scramble when the deadlines begin to get closer. Hopefully these tax tips have been helpful and you feel more prepared to tackle your taxes from now on.
Moving forward, if you have any questions about tax strategies or planning, let’s connect at your earliest convenience. Call our Boca Raton office at 561-447-1997 to schedule a time to chat!