How to Prepare for the Tax-Filing Season – Tips for You
by Mike K. Post your article at Aleshatech.comThe IRS expects every taxpayer to submit their tax returns
and pay what they owe on time. As you know, tax filing is not a simple affair
and involves a lot of documentation and calculations. And that is why the IRS
gives taxpayers several months to prepare and submit their tax returns. They
also allow for an extension period to file taxes to ensure no taxpayer is left
behind. If you don’t comply, IRS can impose heavy penalties or even take tax
collection enforcement measures against you. To be on the safe side, here are
some tips to ensure you are ready for the tax-filing season.
Gather your documents
Even if you want to hire a tax preparer to prepare and
submit your tax returns, you still have some work to do – gather all the
documents and receipts required. You need documents from your employers such as
W2 form to show your income and withheld taxes. If you are in business, you
need bank statements and forms 1099 that show your earnings. There are various
forms of 1099 such as form 1099-DIV for dividends, form 1099-INT for interest,
among others. When it comes to deductions, you need to have receipts to back up
your claim. Gather the receipts and determine whether to itemize your
deductions or take a standard deduction.
Carefully look at tax
credits and deductions you are entitled to
If you want to reduce your tax bill or even get a huge tax
refund, you need to take advantage of all tax credits and deductions you are
entitled to. Earned Income Tax credit,
American Opportunity Tax Credit, energy tax credit, among other are some the
credits you can claim if you qualify. When you look at all the credits and
deductions available to you, choose the ones that lower your tax bill or even
increase your tax refund. Use tax calculators to get an estimate of the tax
credits and deductions. For instance, in case of EITC, use earned income credit calculator.
The information will help you estimate your tax bill or tax refund.
Do the math
It’s always important to calculate to know how much you owe
or what the IRS owes you in tax refund. This will help you plan how you will
pay the tax bill or how you will spend the tax refund once it hits your bank
account. Just use online tax calculators for the math. For tax credits, you can
use earned income credit calculator which will give you exact
amount of tax credit you are entitled to. Also, use a trusted tax calculator to
calculate your taxable income and tax bill or tax refund.
Find a tax preparer –
tax prep software the best option
Tax preparation can be a complicated and stressful process.
You can avoid the stress by hiring a tax preparer. The tax preparer will ask
you for personal information and all the required documents, and will do the
rest. If you don’t want to work with a tax preparer, just look for a tax
preparation software. It’s easy, fast and convenient.
Don’t be afraid to
file for an extension
If you notice that you can’t complete filing your tax
returns by the deadline day, you can file for an extension. However, to avoid
penalties, you should estimate your tax bill and pay it before the deadline.
It’s advisable not to rush the tax preparation or filing process because that
may contribute to common errors such as spelling and calculation errors.
Final Words
The above tips will help you prepare and file your taxes on
time. In today’s digital world, it’s always advisable to use a trusted tax
preparation and filing software. It’s easy and fast. Hiring a tax preparer is
another option, but the most important thing is to provide accurate information.
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Created on Aug 27th 2021 23:51. Viewed 210 times.