Tax season is here- starting from 27 January 2020, when IRS will start accepting the paper and electronic tax returns up to 15 April 2020.
With so many forms to fill and numbers to keep track of, many Americans are still unclear about the Tax Cuts and Jobs Act amendment last year.
Thus, you would not want to leave the things until the week before April 15 and become a victim to “ghost” tax return preparers because of rushing into the tax filing process at the last moment.
“Anyone who is paid to prepare federal tax returns must have a valid PTIN (Preparer Tax Identification Number), but a ghost preparer would not sign the tax return they prepare. Paid preparers must sign and include their PTIN. If failing to do so, then they are just looking to make a fast buck by promising a big refund or charging fees based on the amount of refund. “
There is nothing wrong when we say, tax preparation during the season can become a stressful and time-consuming activity, testing the level of your patience to tackle all the challenges.
Here are a few tips to reduce the stress and last-minute hassles while preparing taxes so that you have a smooth tax season.
1. Get Organized
Getting organized is the foremost part of the tax preparation and filing process, which includes planning, categorizing, and prioritizing all the tasks and gathering your required documents for the process. You should collect all the forms you need in one place, which would depend on the type of organization you are working in.
Moreover, tracking and managing various expenses and receipts may not be feasible during the tax season, which can turn into a struggle while you have so many tasks lined up. Hence, you can consider going digital using the applications to store your documents online, keeping them safe and handy during the time of need.
2. Use Technology
In this digital era, technology has emerged as a lifesaver for accounting professionals. Within the past few years only, numerous accounting and tax solutions have been launched in the market, which has empowered the CPAs and tax preparers with the automation and accuracy in filing taxes.
Modern-day technologies like Cloud-based Accounting, Artificial Intelligence, Machine Learning, Next Generation Mobile Apps, Digital Currency, and many more, have made their way in the industry to ease up the stressful process while saving time and money.
With so many advanced technologies available, cloud accounting has emerged to be the most promising. It has enabled accounting businesses, enterprises, SMBs to access financial data from anywhere and anytime. It allows for easy collaboration between accountants and clients, which makes the work easier and more efficient.
3. Stay Updated About Tax Regulations
As a tax professional, it’s important to be updated about the latest tax laws and reforms by the IRS. Failing to do so can result in the wrong deductions, contributions to the accounts, and penalties. The IRS has already shared the information about New Federal Income Brackets and Tax Rates for 2019, High Standard deductions in 2019, and everything that’s staying the same for the 2020 tax season.
For a seamless tax season, you are recommended to acquire all the information about tax regulations by IRS and share the updates over emails to clients, other accountants, and community.
4. Check for Deductions and Credits
You should keep track of your bills, receipts, travel expenses, and office expenses, whether you are a self-employed individual, an employee, a business owner, or an employer. With keeping track, you can try to reduce the deductible expenses.
According to IRS, one out of every five employees fails to claim their earned income tax credit. There is always an opportunity to reduce the amount owed on the tax bill as common credits like Child and Dependent Care Credit, the American Opportunity Tax Credit, the Premium Tax Credit, and the Save’s tax Credit are available, for which you can qualify.
5. Beware of Frauds
IRS is already taking significant steps to identify and stop tax frauds. But still, there are numerous media stories about criminals filing fraudulent tax returns. It is important to protect crucial business and clients’ data and beware of security threats like phishing emails, Ghost Tax Preparers, malware attacks, and identity attacks.
It is always best to practice safe computing using firewalls, strong passwords, storing data on the cloud so that it is safe from cybercriminals. You must know your tax preparers and their security practices. They should have a valid PTIN and offers you the optimal security measures while filing taxes.
6. Hire Experts
A professional tax preparer and accountant comes with great knowledge and experience in the field. Hence, you should seek professional help, no matter how updated you are about the tax reforms and other areas.
You may try to reduce the expenses by not hiring the experts, but always remember, these experts have the idea of all the challenges during the season and professionally trained to save you more than the investment.
To Sum It Up
Tax season may bring a stressful time for you or the business, but if you are prepared, organized, and managing the tasks effectively from starting only, you can achieve success and save up so much.
At last, you are recommended to file tax returns electronically as soon as the commencement date arrives to avoid chances of frauds, last-minute anxiety, and also get your refunds before April ends.
If you have some more tips to look out for the tax season 2020, let us know in the comment section.