Why You Should Prepare for Tax Season Now
Tax season can often be one of the most stressful times of the year. However, it doesn’t have to be. Some of the added stress comes from not being prepared. The frustration of digging through filing cabinets, shoeboxes, and piles of deteriorating documents to find that one form needed to complete annual taxes can often be the tipping point to throwing one’s hands up and simply ignoring his or her tax obligations resulting in a late filing or worse, neglecting to file.
If at all possible, the best time to start preparing for the next tax season is in the month of January! This maybe difficult to do as most are preparing to account for the previous year, but it’s not impossible. It simply takes planning and organization.
Here are some helpful tips to follow to make the next tax season less frustrating:
TIP #1 – Make Sure All Legal Documents are Accessible
This is when it’s time to make sure that every person who will be included in the annual filing has all of his or her legal documents. Be sure to have legal United States (US) identification with a picture I.D. such as a driver’s license, passport, visas, green cards, adoption papers, marriage certificates, social security cards—anything that proves that individual is a legal US citizen.
These types of documentations will always have a series of unique numbers that will identify a person. Even if the taxpayer knows these numbers by heart, it is still important that one has legal documentation to back up every bit of information provided in an annual filing.
TIP #2 – Gather Tax Documents
Usually at the beginning of the year, one can expect tax documents to show up in his or her mailbox. It’s quite common to not have a clue what they are for! Some may look familiar and others won’t.
The type of tax documents one receives depends on what they did that previous year. For example, if someone started college that tax year, he or she will receive a 1098-T statement indicating the amount of qualified expenses that student has paid. If a person started a freelancing job and earned over $500 that tax year, he or she will receive a 1099-MISC form from the company that paid for his or her services.
Other forms may show up in a sealed envelope that will indicate somewhere outside the envelope that the document is for tax records. It is best to just file these documents away into a folder to present to the tax preparer.
TIP #3 -Create a Folder for Medical Expenses
Another folder that should be created in preparation for the tax season is a medical expense folder.
Taxpayers are allotted a deduction, the amount depending on the type of household. However, if the amount of household expenses exceeds the standard deduction, the taxpayer can fill out an itemized deduction form. As long as those deductions are supported with the proper paperwork, the taxpayer can substitute this for the standardized deduction.
Need Help with These Preparations?
One could always go to a tax preparation service to seek help for the upcoming tax season. However, it is important to keep in mind that these types of businesses specialize in preparing annual tax filings, not the preparatory stage of the actual filing process! There is a difference!
Confused? Don’t be. Success Tax Relief is a tax consultation firm that has been in the business of tax relief services for over 30 years. Throughout these years, we have acquired the knowledge and experience of working with tax lawyers, financial analyst, tax consultants, and of course, the Internal Revenue Service. Call us today at 1-877-825-1179 or schedule a consultation appointment with us online and start the preparation process now!