Tips for Tax Season

It’s that time of year already.  Whether you do taxes on your own, or hire a professional, there are many things you can do to prepare for this tax season.  Having everything together will save time and lower your stress levels when you’re ready to prepare your taxes.  Follow these helpful tips:

• Get all of your paperwork together:  File all papers (receipts, W2s, pay stubs, etc) in a small folder or binder.  If you prefer the technological route, buy a comprehensive personal finance software, like Quicken.  Organize tax statements, and calculate medical and charitable expenses.  Find out what you’ll need and get it ready before the day you file.

• Prepare early: If you wait until the April 14th deadline, you’ll be scrambling to get everything done in time.  Get everything together and file early to avoid penalties and/or interest.

• Hire a professional:  Think about hiring an enrolled agent to prepare your taxes.  Enrolled agents are federally authorized tax agents that represent taxpayers.  It usually costs less to hire an enrolled agent than a tax attorney or CPA.  Taxes can be tricky.  Enrollment agents deal with many different tax-related situations on a daily basis.  They are equipped to deal with all circumstances – regardless how unique. 

• Visit the IRS website: Check the Internal Revenue Service’s website for tax tips, info, guidelines, etc.  What’s new this year?  Is there an age limit on claiming my children as dependents? What should I do if I make a mistake on my federal return?  Do I qualify for the Earned Income Credit?  IRS.gov is the official authority.

• Research Deductions and Credits:  People miss out on a ton of money each year due to missed deductions and credits.  Do your research to find out what you can claim and what credits you might qualify for. Deductions reduce income and credits reduce your liabilities.