When To Start Preparing For Tax Season
- July 22, 2019
- Posted by: asal
- Category: Tax Preparation
Taxes are due every year, typically on or around April 15. So, when should you start preparing for tax season? Moreover, should you work with a tax professional to prepare your taxes? We have your answers. Tax season can be overwhelming for the average tax paying citizen. Even though tax season still feels far away, you can never be too prepared. Many people will wait until the last moment to prepare their taxes. When you procrastinate, it can lead to mistakes, forgetting necessary forms, and spending more money on filing. So how early is too early to start preparing your taxes? The answer is, it’s never too soon. If you keep track of what you want to deduct and other items throughout the year, it will make tax season much more straightforward. Plus, working with a tax professional can help you prepare for any back taxes you may owe.
First, Keep Track of Previous Tax Information
When thinking about the next year’s taxes, you also have to consider your previous years’ taxes. Make sure you keep copies of the past year’s return for you and your spouse, if applicable. Your tax professional will also need copies of your social security card and driver’s license.
Keep Track of Necessary Paperwork for Your Dependents
If you have children, or elderly family members you take care of, you will need documents for them such as:
- Their social security and tax ID numbers
- Dates of birth
- Childcare payment records (including the care ‘provider’s tax ID number)
- Adoption papers, if applicable
- Tax Form 8332 that demonstrates a custodial parent is releasing their right to claim the child to you, if applicable
- Proof of any alimony payments that carry an ‘ex-spouse’s social security number
- Relevant death certificates
If You Have Multiple Sources of Income, Keep Track of It
You may be self-employed or have multiple sources of income. Either way, you will need one or more of the following forms:
- W-2 for wages/salary, federal and state tax withholding, tips, and earned income credit. Typically, your employer will send this to you by January 31 of that tax year.
- If you are unemployed and receiving unemployment benefits, ‘you’ll need Form 1099-G
- For any freelance work ‘you’ve completed, ‘you’ll need Form 1099-Misc. You should receive this form from all of your clients.
- Form 1099-R for annuity income, IRA and pension
- Earned dividends form 1099-Div
- Forms 1099-B, 1099-S for income from sales of property and stock
- Gambling income Form W-2G
- Other types of income such as prizes and awards (lottery winnings), jury duty pay, alimony, or money from rentals
Determine For Which Deductions You May Qualify
A tax deduction is a decrease in income that can be subject to state and federal income taxes. When you lessen your total taxable income, it can reduce the amount you owe in back taxes. For any deductions you claim, you will need to provide records. Several potential deductions for which you may qualify are below. Working with a tax professional can help you better determine for which deductions you are eligible.
- Records of all expenses if self-employed, including credit card statements and receipts
- Proof of payments for rental homes
- Records of costs for investments
- Real estate and property tax records
- Evidence of any charitable donations made, including non-cash and mileage driven for charitable purposes
- Records of medical expenses, including payments made to doctors, dentist, clinics, or hospitals
- Student loan interest
- Insurance payments
- Childcare expenses, including daycare and babysitters
- Qualifying educational expenses
Gather Your Financial Information
You may also want to gather your bank account number and routing number ahead of time. If you want your tax refund directly deposited into your account, you’ll need your bank information. Your bank information can is at the bottom of your checks.
Get Help From A Tax Professional
While you may be able to save money doing taxes yourself, a tax professional can save you even more money. Below are some of the benefits of working with a tax professional ahead of tax season.
The tax burden does not fall on you
Some tax returns can be complicated. Trying to figure out a complicated tax return is time-consuming, and the error risk is high. A professional tax services firm will ease this burden.
A tax professional can reduce errors
It can be straightforward to make a simple error on your tax returns. Some common mistakes people make include entering payments on the wrong line and simple math errors. Making an error on your return can delay a tax refund. The chances of a tax professional making a simple mistake are low.
Tax professionals can offer you professional tax advice
It’s challenging to keep up with and understand tax rules. You must qualify for any deduction or credit ‘you’re claiming. A tax professional can help you determine for which tax credits and deductions you are eligible.
In case of future tax problems, a tax professional can help
If ‘there’s an error on your tax returns, or you get a huge tax bill, a tax services company can help. Back taxes are a huge problem that many Americans can face. Platinum Tax Defenders not only employ CPAs who can help you prepare your taxes; they work with tax attorneys and x-IRS tax attorneys. If the IRS is threatening to sue you or owe much money, a tax attorney can help.
Need help preparing for next year’s taxes? Call Platinum Tax Defenders today
If you have questions about taxes or facing tax debt, call Platinum Tax Defenders today. We can determine whether you should work with a CPA, enrolled agent, or tax attorney. Our experienced team has been serving clients across the country since 2011. We can help you with tax resolution by negotiating with the IRS. If you need to make changes to previous tax returns, we can help you with that too. Our tax relief specialists understand the complicated tax code, especially when your tax refund is at risk. If you’re worried the IRS may seize your tax refund, call Platinum Tax Defenders for a free consultation today.