As the world is celebrating the holiday season, most of the accounting professionals have started preparing for the tax season. The Internal Revenue Service (IRS) has announced that the tax season starts from January 23, 2017 and the deadline for filing of income tax will be April 18, 2017. To catch with these deadlines, the coming months are going to keep accounting professionals and taxpayers extremely busy.
Preparing taxes involves a number of operations to summarize the financial transactions of the year. Depending on the complexities of the expenses and the income sources, the hassles and efforts in preparing taxes grow exponentially. However, there are certain taxpayers who are able to file the taxes with utmost ease. How do they do that?
Here are some useful tips that can help you master the taxes and you can prepare for the tax season 2017 with ease.
1. Understand Who (or What) Can Lend You A Helping Hand
Some taxpayers trust the traditional paper filing. Some opt for a professional’s help. Some like to rely on the accounting software. Then there are some who go with both – professional and tax software. Now, consider the factors, such as – the time that you can invest, skills with taxes, budget, etc. and then pick the way that you can go with.
For the busy souls, who have a large amount to file, going with the accounting professional is a good choice. Collaborating with them over the cloud-based tax software will keep you updated with the changes in the tax file and that too from anywhere, anytime. For those with the smaller budget, there are several tax software that can offer cost-effective filing solutions.
Another option that first-time taxpayers can consider is asking a friend’s help. Make sure the friend has reliable skill or experience.
2. Look For Updates
Small updates to the tax regulations can influence the overall filing for the individual in a big way. Filing tax returns with older regulations can cause inaccuracy with the amount, which may invite penalty. So, remain updated with the recent changes so that you can file the taxes accurately and escape other hassles.
The best way to find the regulations updates is the website of IRS. Apart from that, subscribing to accounting blogs and news can offer a great help. In case you are going to hire an accountant, you can escape the research work as most of the tax experts are aware of changes from the tax regulatory authorities and will deploy them as needed.
3. Check Your Previous Tax Documents
Unless your business or employment process has not gone through a major transformation, it is likely that most of the tax preparation methods are going to remain similar. So, by looking into the previous year tax documents, you can realize a basic plan to go with. This way you can even avoid the delays and errors that might have occurred during the previous filing.
There are certain reasons that can change the financial structure in a big way. Merger or acquisition of business and filing as married are some of those reasons. Along with them, align with the regulation changes and you are all set to file the taxes with comfort.
4. Get Organized With Forms and Documents
Forms that one may need for filing taxes are in plenty, such as Form 1099-MISC, Form 1095-A, W-2 earning statements, 1098 Forms, etc. Depending on the various factors, IRS will require you to provide some document related to financial transactions made during the year. Get them organized and get things simplified.
Again, technology can offer a reliable help for you with it. Most of the tax and accounting software are equipped with the features to fill the forms and they can even store the invoices and bills automatically. So, there is just the need of some data entry that you need to do. If your tax software can integrate with payment cards and bank accounts, the need for manual data entry is further reduced.
5. Beware of Frauds
Rise in the number of tax frauds during the tax season is noticeably higher, according to IRS. To protect the taxpayers’ money, IRS constantly deploys several solutions. However, given the ways in which fraudsters try to prey, it is important from to be cautious at the taxpayer’s end as well.
Filing taxes early is another way to counter the hijacking of tax returns. Do not share your tax filing details with anyone without proper reasoning and the devices, on which you work your taxes, must be secured as well.