Tax Season is Fast Approaching: Here’s How You Can Get Ready
It’s important to get ready for tax season as early as possible. Here’s how.
Tax season is often considered to be one of the most dreaded times of the year; however, carefully preparing for tax season can ensure that the experience isn’t horrible. Nobody wants to pay taxes, but if you’re a working American, it’s something you have to do. Simple prepping for tax season, getting organized, and staying on top of tasks can ensure that filing your taxes is a seamless process. Whether you’re filing jointly with a spouse or on your own, there are several ways you can get ready for tax season.
First off, make sure you know what your sources of income are. This is one of the most important parts of your tax return. You need to know exactly how much money you made and from which employers. If you’re an independent contractor or you receive money from sources that aren’t your primary place of employment, you’ll need to record those, too. Generally speaking, if you’re an independent contractor who makes at least $600 from a particular business or company, you’ll receive a 1099 form you can use when you file your taxes. Note that even if you receive cash payments, you’re required to report these to the IRS, too. If you notice a discrepancy in what is reported on your tax forms and what you actually made, contact your employer immediately so they can correct the form.
You’ll also need to know what charitable donations you made, if any. Did you donate food or clothing to a local charity? Did you give money to a church? Did you donate to funds designed to help those in need? Always save your receipts for charitable contributions, as these can generally be deducted from your taxes. Note that you can ask for receipts when you make a donation even if you’re giving physical items.
It’s also important to save your receipts. If you work from home, you may be able to deduct some of your living expenses if you have a home office. Save things like your electric and Internet bills. You may also be able to deduct some of your personal computer upkeep costs, such as fees for computer repairs or even replacing the computer entirely if you use it for work. When it comes to deductions for a home office, you can’t guess. You need to have precise numbers, which is why you need to save your receipts.
Make sure you start setting aside a portion of your income each month to prepare for tax season. It’s important that you have the money available to pay if you’re going to owe taxes. This can greatly reduce your stress and minimize any anxiety you may feel about dealing with tax season. Make it a habit to set aside a specific amount of money each month. If you end up not using the full amount to pay your taxes, you can treat yourself to something fun.
If you have questions about your taxes or you believe you made a legal mistake on your taxes and you’ve been dealing with the IRS, reach out to a tax law attorney who can help you.
