Are you one of the millions of people who dread doing their taxes? Do you always want to put off filing until the very last minute? Here are some great practices to help you prepare for tax season year-round.
Schedule Monthly Check-Ins
A lot can change in one year. Jobs and income, family status, and so much more. All of these things will affect your taxes, but by the time tax season rolls around, you may realize you didn’t withhold enough, and now you owe a large, one-time sum. It would’ve been easier to manage if you’d caught it sooner, so why not set yourself up for success this year?
Just like paying bills or subscription costs, you should also check in with your tax maintenance every month. That way, if you or your spouse had a job change, you inherited a large sum of money, or you started a family, you’ll know what to expect next January, and you can better prepare for it.
Keep (& Organize) Your Receipts
We know, we know – you have that pile or that box with all your receipts. Or you moved all your electronic receipts to a folder in your email app. But keeping track of the expenses that may result in deductions is an exercise in organization as well as collection.
Before making a big purchase or payment, make sure to document the expenses you plan to count as deductions, from rent to mileage to charitable donations. It’s easier to organize one month of receipts 12 times a year than it is to do them all at once and hope you didn’t forget anything.
Watch for Out-of-Season Tax Documents
Just because you aren’t ready to start thinking about your taxes doesn’t mean you won’t receive something in the middle of the year that you’ll need to keep for tax purposes.
When you sort your mail (both physical and electronic), make sure to pay attention to documents that expressly say they are for tax purposes, and to set aside anything else you think might be helpful or needed when you file your taxes.
This includes checking your spam or junk folders for tax documents. When in doubt, call a trusted tax accountant or adviser to be sure what you received is legitimate.
Small Business Tips: Quarterly Deep Dives
If you are an independent contractor or you own your own business, staying in compliance with the U.S. tax code is important so you don’t incur devastating penalties. That’s why it’s recommended that you always make sure to go through the previous quarter’s financials in a timely manner.
Be sure all aspects of your business’s tax information can be accounted for, and any discrepancies remedied before tax season if possible. Since most small businesses pay estimated taxes based on previous years’ filings, you should also take a good look of how last year’s quarters compare to this year, so you can catch any potentially large fluctuations quickly. Find out more about 1099 filing penalties here.
Talk to a Tax Expert
If you are filing taxes as a business or individual for the first time, or you just want to know your forms were filled out correctly, do some research on tax professionals. It’s their business to make sure your taxes are filed expertly and on time. Efile360 can help you with a wide variety of forms, found here.
Protect your business by taking advantage of the knowledge and help eFile360 offers with 1099, 1098, W-2, and ACA form filing and printing. Sign up for a free eFile360 account today.