4 Ways To Get A Head Start On Your Federal Taxes
Tax season is here and you should have started receiving your W-2s and 1099s by now. This means that you should start preparing for filing your federal taxes. The following tips will help you get a head start on your taxes now as well as anytime throughout the year:
Tip #1: Keep Track of Your Receipts
While taking the standard deduction is easy, not everyone does this. For some individuals, itemizing their deductions can get them a bigger refund or reduce the amount that they have to pay in. If you are itemizing your deductions, it is extremely important to maintain a system that allows you to keep all of your receipts in one location all year. After all, if you lose any of your receipts, it will cost you when tax time rolls around. It also helps to set aside time throughout the year to sort through them so that you aren't scrambling at the very last minute.
Tip #2: Store Prior Tax Returns Together
When preparing your current tax return, you will need your previous year's tax return for some important data. Therefore, it is important that all of your prior tax returns are stored together and in a safe place that is easily accessible.
Tip #3: Check All of Your Deductions
Take the time to look back at what has happened during the tax year. Did any major life events occur? For example, did you get married, have a child, buy a house, change jobs, etc.? Any one of these life events could leave you open to a sizable deduction on your tax return. Therefore, to ensure that you don't overpay your taxes this year, be diligent and do your research on all potential deductions.
Tip #4: Consider Requesting an Extension
Since this article is about being prepared, asking for an extension on filing your taxes may seem a bit counterintuitive to many of you. However, by filing for an extension and then filing your taxes later in the year, it will allow you to make sure that you have all of the documents and information ready that you need to successfully file your taxes. Plus, accountants won't be as swamped and will be able to dedicate more time to you individually. Filing for an extension is also particularly beneficial for individuals who are experiencing stressful life events, such as individuals who live in areas that were hit by hurricanes.
For more tips, contact tax preparation service providers like Dominic O. Amaugwu, PC.