Tax Preparation is necessary for taxpayers, from small business owners to large corporations. However, for newcomers, it can seem like an overwhelming process. The good news is that with the right approach, preparing for taxes doesn’t have to be an exhausting task. By taking the time to understand the process and getting organized, taxpayers can file their taxes with confidence and ease.
Whether preparing to file your taxes by yourself or hiring a professional preparer, the preparation steps remain the same. And believe me they are not as overwhelming as they appear. Hiring professional bodies, for instance, tax preparation in Edmonton, is a great way to make the process easier and more professional, especially if it’s your first time!
Stick with us to the very end to get familiar with all the steps you must consider before preparing your taxes. The steps make the process smooth and offer an organized way of preparing your taxes.
Gather all the Required Documents
Gathering and organising the required documents before preparing for your taxes helps you throughout the process. It gets a lot easier when all the necessary documents including the W-2s and 1099 forms, as well as the social security forms if applicable.
Organize the necessary documents nicely and keep them somewhere they can easily be accessed so you don’t have to worry about the docs anymore. Therefore, it’s necessary to gather documents by January and match them with your record before you file taxes.
Hire a Professional or do it Yourself?
The next step in the preparation of taxes is to decide whether you’ll file the taxes yourself or hire a tax preparer. For people, who’ve been in the chase for long, it’s pretty easy to prepare and file their taxes independently. For newcomers, however, it becomes quite a challenging task, and hiring a professional preparer becomes the need of the hour.
Choose your Tax Preparer
Finding a professional tax preparer is not difficult in this modern era, where everything is a call away. You can look for an experienced tax preparer online or take referrals from friends and family. No matter how you find your tax preparer, ensure he has PTIN or Preparer Tax Identification Number. Only the professionals with PTIN are authorized for federal taxes and their preparation.
Tax preparer charge fee depends on several factors and may vary; therefore, it’s best to decide the fee before discussing your tax preparation to avoid any unfortunate events.
Schedule an Appointment ASAP!
Preparing for your taxes, and filing them before the deadline is crucial or you won’t get any return, irrespective of the amount. How is it related to scheduling an appointment with your tax preparer? Well, you may not be able to file your tax without the preparer, and the longer it takes for consultation the longer it’ll take to file the taxes.
So, if you want to bring down your tax bills, schedule the meetings, consult the preparer and sort out things before the deadline.
Pull Together All the Receipts
Whether you are filing for the standard deduction, your charitable contributions, or you itemize your deductions; receipts play an important role in filing the return. The set of rules for each one of the deductions and for charitable contributions may vary; therefore, pulling all the records together is crucial to claim your returns.
Other deductions, like medical costs (not covered by the insurance policy), your property taxes, and any other expenses subject to the investments you made, are categorized under the itemized deductions. Again, receipts are required to file the tax returns.
Regarding charitable contributions, you need a written acknowledgement stating that you did not receive anything in return for the charity you made. Usually, this written acknowledgement is given after a certain amount. If you have not received this acknowledgement, file a request to the respective charity to grant it to you to file the return.
Discuss the filings with your tax preparer before your tax preparation so that he can forward your requests in writing.
Bring out the Copy of Last Year’s Return
A copy of last year’s return is important for both your new tax preparation and you; to see the record of things you do not want to overlook this year. Your tax preparer from the previous year may have all the required information from the past years too. What’s crucial is, discussing everything with your new tax preparer before the deadline to get the whole thing straight.
Use the last year’s records to track the 1099 forms from the banks. See if the same banks have sent you the 1099 forms this year if you have not closed the accounts. This way, the previous year’s record helps you ensure what’s different for this year.
Furthermore, the last year’s records also help you with charitable contributions. You can call the charities to see if you made the contributions again. Checking the charitable returns also help you to donate towards the charities in case you forgot this year.
Double-Check Your Work
It is important to double-check all the documents before filing your tax return and preparing for it. You can discuss the “double-check” with your tax preparer to ensure all the records match.
Double-check not only ensure the accuracy of the records you’re about to file the return for, but it also helps you rule out anything you might have missed.
When is the Deadline for Filing the Tax Return?
The deadline for filing the tax return usually ends by the mid to end of April every year. Therefore, you need to prepare your taxes before that. The deadline is strict for everyone filing, except for the extensions given in case of holidays.
Over to You!
Although no rocket science is involved in filing a tax return or preparing for it, it’s always better to choose the safe side by hiring professional tax preparers. Tax preparers are familiar with the work and can handle anything that might seem difficult.
The most important step in ta preparation is punctuality; the sooner you start, the smoother the process gets, and you don’t have to worry about the deadline.