Incredible Tips
Tax season can be quite overwhelming, but for many taxpayers, it can be an exciting season, especially if they will receive their tax refund. Many of them usually look forward to it to use the refund on anything, from investing the money, saving for retirement, or treating themselves with nice clothes, wigs, jewelry, etc. But what exactly is a tax refund.
What will you gain from this article?
What is tax season?
6 Tips to help prepare for tax season
Why should you buy a wig this tax refund season?
What is tax season?
The term tax season refers to the period when individuals or businesses prepare financial statements and reports for the previous year and submit their tax returns. The period is generally between January 1st and April 15th of every year. In the United States, individuals must submit their annual tax returns by April 15. Submitting tax returns past tax season will result in late penalty fees and even interest charges. This is why early preparation is essential so that you can submit tax returns on time. With that said, let’s look at some of the incredible tips that can help you prepare for a tax return season.
6 Tips to help prepare for tax season
Here are tips that can help prepare for the 2023 tax season
1. Decide who will prepare and file your tax returns
Before anything else, you have to decide how you will file your returns. Will you do it yourself or seek the help of a professional or use online software to file your tax.
If you are an investor, a freelancer, or you operate a small business, it would be a good idea to seek the help of a CPA or a tax professional. But if you have an effortless tax filing, which involves a basic income and wage statement and fewer deductions, filing returns yourself may be an ideal option as it is cost-effective. Remember that if you choose to work with a tax professional or CPA, it is advisable to contact them early since they usually don’t take new clients when Tax Day approaches.
2. Organize your tax documents and financial records
Once you have decided how you will file your returns, the next crucial step is to gather your tax documents and financial records. Organizing your tax documents and financial records in advance can make your filing process easier and faster. Remember that you cannot file your taxes if you don’t have essential financial information at your disposal. Some of the documents you need include W2, which is provided by your employer, social security income statement, investment property income, alimony payments, mortgage interest, medical expenses, child care costs, charitable contributions, higher education expenses, student loan interest, etc.
3. Create an online Tax Account with the IRS
If you want an easy way to obtain tax documents without having to contact IRS by either mail or phone you should create an online tax account with the agency. This will allow you to log into an account and view payment balances, create payment arrangements, and check out the previous year’s tax returns. However, it is worth mentioning that this feature does not allow people to electronically file their tax returns.
4. Pay attention to any changes in Tax Law
Each year, the government usually tries to play with the tax legislation, in a bid to simplify things. So you will want to find out if there are any changes in Tax Law and how they can impact you. In addition to that, you need to make sure that you use the correct forms because the IRS usually updates its forms each year. To make sure that you have the latest and correct form, you can check on the IRS website and ensure that the professional helping you file your tax returns is up to speed, as well.
5. Decide if you want to itemize
Of course, the decision as to whether or not to itemize has not become very important since the introduction of standard deductions. However, it can still be of great benefit if one is eligible for certain deductions and tax breaks. For instance, if one has had a lot of medical expenses last year and they met the 10% threshold, they can still itemize to claim these expenses. In addition to that, if a person is filing business taxes, they may be able to write off expenses like business equipment. So, it is important to find out if you can itemize some of your expenses before you file your tax returns.
6. Pay taxes due by April 15
If you suspect you could owe taxes when filing your tax returns, it is an excellent idea to pay them before the due date, which is April 15. During the 2020 tax season, the IRS extended the deadline to July 15, 2020, which gave taxpayers three additional months to file their returns. This was due to the ongoing global pandemic. But the IRS has not issued any statement as to whether or not it will extend 2023 tax due dates. This is why you need to ensure that you pay your taxes before the deadline, which is April 15 because late submission will result in a penalty. Even if you can’t pay the full amount you owe, it is still a good idea to pay what you can as soon as possible
Whether you hire a CPA or a tax professional to help you file your return or you handle it yourself, preparing early by having the correct documents and records is essential. This will save you time and money. The earlier you start to prepare, the smoother and faster the filing process will be, hence leaving you with time to focus on other important things.
Why should you buy a wig this tax refund season? <<Click here to read.
