Tax season sneaks up on us all every year and even if you try to be prepared, we find ourselves anxious and overwhelmed. Below are some simple tax tips for how to handle your tax return and better prepare for next year.
- Gather all your documents in advance. Make sure you have all the documents and forms you need to file your taxes before you start to file them. This includes all receipts, canceled checks and anything else you are claiming on your return. Keep original documents and make copies of them. Group together your papers regarding mortgage, property taxes, charitable donations and gifts and any other items that can count as deductions. Organization is key!
- Keep track of all your important records. Gather information at the beginning of the year and you will save time later. Keep track of your expenses on a quarterly or monthly basis, especially if you are self-employed. Keep record of your tuition, books, computers, etc. because you will be able to claim that as a deduction. Keep your records for at least three years, especially the original copies.
- Decide how you will file. Consider filing a different tax status if you are eligible for one. (For example if you are married you can either file jointly or separately.) Then once you decide on how you will file, you should review, review, review. Make sure you aren’t rushing this and double-check everything before you submit. Consider an accountant to do your taxes. Because there are constant changes in the tax codes, you may be more comfortable hiring someone to do your taxes than doing them yourself.
Deduct anything you can for clients if you are self-employed. You can fully deduct any transportation costs. If you have signed up for health insurance, you can deduct these for both you and your spouse. You can also deduct meals (those for you and clients), lodging, and entertainment for any business-related expenses.