Instead of waiting for the last minute, make the first move this tax season, get yourself from behind the financial eight ball by preparing yourself for April 15 with the following steps:
One – Organize Your Expenses into Personal and Business Expenses
One of the best ways to keep the Internal Revenue Service off of your back is to separate and prepare all of your business expenses from your personal expenses. This separation should occur in a very quantitative way, so all of your business’ tax records are prepped, and expenses should be recorded meticulously into a spreadsheet program.
More comprehensive tax software programs will be able to divide up your expenses and give them their appropriate deduction heading under the percentages that they will incur during the current tax season. It is great to have this calculation done beforehand in order to be able to estimate the total amount of tax dollars that you owe the government. The earlier that this calculation is figured out, the better it is for your stress levels.
Two – Separate all Receipts into Their Appropriate Headings
Tallying up receipts is one of the most time-consuming parts of preparing for tax season, so instead of procrastinating, get this meticulous task out of the way right now. There are many software programs that will help you to keep up with the numbers that you find and organize your receipts into categories that match the categories that the IRS recognizes.
Three – Perform More Than One Calculation for the Taxes That you Owe or are Owed
Using resources that are freely available around the Internet and through software companies, you can easily give yourself a back-of-the-napkin calculation for the taxes that you will owe or are owed, and the reason to calculate your taxes earlier so that you can get a second opinion without having to rush. In the latter part of March and April, professional accountants and tax preparation companies become overwhelmed with the amount of work that they receive. You want to make sure to get ahead of the crowd so that you can get the results back more quickly.
Four – Revive your Old Tax Records to see if There are Any Deductions Hiding in Past Years
If you have ongoing investments or expenses such as mortgages and automobiles that occur through many years, it is very possible that you have many deductions hiding within the depreciation and interest payments of these investments and assets. In order to take full advantage of this information, you should go through your previous year’s tax records before the due date becomes a nuisance to you.
By going through previous year’s tax records, you will also be able to find certain figures that will allow you to complete your current year’s tax records more efficiently. For instance, most tax filers will definitely need their adjusted gross income for the previous year in order to match records with the current year.
See Also:
- What You Need to Know About Deducting Travel Expenses
- The Differences Between Term and Whole-Life Insurance
- How To Develop Winning Money Management Skills
- Avoid the Hassle of an IRS Audit
- Best States for Relocation with Regards to Income Tax
Recommendations from Amazon:
- J.K. Lasser’s Your Income Tax 2013: For Preparing Your 2012 Tax Return
- Taxes Made Simple: Income Taxes Explained in 100 Pages or Less
- Tax Preparation Software
- Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes (Rich Dad Advisors)
Author Bio
Melisa Cammack is a freelance writer, mother, and dedicated wife of 13 years. She spent many years as a financial consultant, specializing in credit card debt consolidation, and enjoyed helping many get their lives back in order whether it was their business credit cards, airline credit cards, or student credit cards.
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