Tax Preparation: 4 Tips To Make This Task Less Stressful
Posted on: 24 September 2019
As the end of the year approaches, some people start to worry about their taxes. Tax filing season never seems far away, and while it may still be several months down the road, you can never start preparing too early. By taking some time and effort to organize your financials and maintain your records throughout the entire year, you will find that the tax preparation process is a bit less stressful and may even actually reduce the amount that you are responsible for paying. Here are four tips to get you started.
Contribute to Retirement Accounts
By contributing to your traditional IRAs and 401(k) accounts, you will be ensuring a comfortable life during your golden years. In addition, this will also help to reduce your current tax liability. As a general rule, deposits into your retirement accounts are completely deductible, which potentially could lower your tax bill by hundreds of dollars at the end of the year.
Make Estimated Tax Payments
Owners of businesses and self-employed contractors must pay estimated taxes every three months. Even if you are only taking on freelance projects here and there or just earn a little money when you drive for a rideshare company, it is important to pay those estimated quarterly taxes on time to avoid any unpleasant surprises, such as late fees.
Keep Organized Records
Preparing your taxes can be overwhelming, but trying to find receipts, invoices, and so on at the very last minute can make things that much more taxing. If you start early in the year and create a strategic filing system and organize your receipts and income statements, this can significantly simplify the process and make sure that you receive each deductible that you are eligible for.
Hire a Tax Professional
While you may be able to create an organizational system that keeps things in order for you throughout the year, it doesn't mean that you have the time or the knowledge to file your own taxes at the end of the year. While there are online filing services that will walk you through the process step by step, you could still enter incorrect information or miss important deductions. Working with a tax preparation professional who is familiar with the latest changes in tax code will ensure that you get each and every deduction that you are able to qualify for and help to prevent common errors that are made during the filing process.
For more information, get in touch with a tax return preparation service in your area today.
Share