Wednesday, August 26, 2020

How To Tackle Your Taxes



Whether you're a single person with a day job or a married professional with a small business, knowing how to handle your tax paperwork can be a daunting task. It's important to ensure you're following the rules as well as not paying more than you need to.

Get Help
A tax professional can take some of the burden off your shoulders. Look for accounting firms specializing in tax return preparation. In addition to handling the paperwork and filing, these agencies may also provide advice and help with tax planning. Freelancers and small business owners can benefit tremendously from these tips. For instance, freelancers are considered both employers and employees by the IRS. A new 2018 law allows for a significant deduction with the right type of business filing, something a tax professional can take care of for you.
Choose the Right Professional
Tax preparers can hold a variety of credentials. Attorneys, certified public accountants or enrolled agents may prepare taxes and are all credentialed through different licensing boards. The IRS website offers these tips for taxpayers looking to verify tax professionals they are considering. Beware of ghost preparers – not the spooky kind of ghosts, the fly-by-night kind that will fail to properly file your return or steal your refund. Paid preparers have a PTIN and are required to include this information on your return. If your preparer doesn't include this consider it a red flag for fraud.
Pull Your Paperwork Together
Once you've chosen a tax advisor you'll want to pull together W-2s, 1099s and other tax forms. Your tax professional will know what you need to provide as long as you're giving them the correct information about your tax situation. Gather documentation regarding all your income sources as well as possible deductions like mortgage interest and charitable donations. Your preparer will know if itemizing is right for you and request information accordingly.
Plan Your Next Move
Take the time to do a little tax planning. Making retirement contributions with a goal in place will give you peace of mind and make it easier to set that money aside. When you know the tax advantages associated with strategic saving you'll be more likely to see your financial goals as attainable. If you freelance or own a business make sure you're keeping a record of expenses and income. Waiting for clients to send 1099s at the end of the year can be stressful and you should always rely on your own records first.

For many people, taxes are a scary prospect. With the right help, they don't have to be.

No comments: