Tax season can be a stressful, but rewarding time, depending on your work and financial situation. With tax time right around the corner, you’re probably anticipating receiving your W-2 from your employer in the mail, and any other necessary documents, within the next few weeks. Today, your taxes can be managed in numerous ways from a personal accountant, a nationwide accounting service, or even, an app on your phone that doesn’t require a visit to an office; the way you choose to have your taxes done is really based on your personal preference. One thing, however, that everyone has in common regardless of how your taxes are done, is how you should prepare for tax time to make it easy on yourself, or your tax professional. Here are a few key ways to better prepare for tax time:
Figure Out Your Preference
As previously mentioned, today, your taxes can be done in various ways. The first step to preparing for tax time, is figuring out how, and who, you want to do your taxes. Do you plan on doing them yourself? Or would you prefer to have them done by an accountant or a tax-preparation service? Keep a few things in mind. If you plan to do them yourself, you want to make sure you have all of the right information and know about the deductions that you’re entitled to. If you plan on hiring an accountant or tax-preparation service, make sure you do the necessary research so you know who you’re working with.
Get Your Forms in Order
Everyone has a different financial situation, and there are multiple tax forms one will need depending on their situation. To get yourself best prepared, figure out which forms are necessary for you during tax time, and get them in order. If you’re unsure, you can always take a look at the IRS website or consult a professional you may know.
Have Previous Tax Returns and Info on Hand
During tax time, it’s not uncommon to need to refer back to the previous year’s tax returns for other information. It’s wise to keep them all in the same place, to avoid scrambling for them at the last minute. This will definitely help you if you’re doing your taxes on your own and will provide a tax professional with all of the correct information.
Another factor that’s dependent on an individual’s personal history are deductions. Life events such as purchasing a home, getting married or having a child can alter your status and entitle you to some beneficial deductions. Additionally, depending on the type of work you do, itemized deductions may also be something to pay attention to; this could be anything you’ve spent your own money on during work, that you can write off for deduction purposes at the end of the year.