Sunday, October 7, 2012

Five Ways to Prepare in Advance for Tax Season

Tax season is just around the corner and it is a good time to start thinking about preparing to file your income tax returns. It may be difficult to think about taxes when you have the holiday season on your mind but you will thank yourself later when filing your taxes is a cinch. People who are more prepared for tax season likely save themselves from making costly errors that can come back to haunt them later down the road.
While the logical thing to do would be to prepare yourself throughout the year for tax time this is hardly the route that most people take. If you are one of those people do not fret because you can quickly get prepared by doing five simple things.
Gather Income Information - The first thing to do in order to be better prepared for tax time is to gather all of the information you have that pertains to any income you earned throughout the year. Not only does this include paystubs and/or w-2 forms but also information having to do with any investment income you may have made as well.
Locate a Tax Preparer - Another important step to take before tax season is fully underway is finding a tax preparer, that is if you do not plan to prepare your own taxes in which case you will want to gather all of the books and forms that you will need. There are many choices in tax preparation professionals so you should determine what you are looking for rather it is low cost, a quick refund, or somebody local.
Tally Up Your Write-Offs - For many individuals write-offs make up for some of the taxes that they owe and can greatly reduce tax debt. If you are going to be claiming any write-offs now is the time to start tallying them up so that your tax preparer can include them in your tax forms.
Pay-off Any IRS Balance That Could Prevent You from Getting a Return - You should also consider paying of any balance that you may own to the IRS that may interfere with a return. If you are unable to pay the full amount you may still be able to prevent this from happening by signing a payment agreement so be sure to look into that option as well.
Hold a Teleconference with Your Accountant and Tax Preparer - Finally, in order to be sure that everything is in order you should hold a conference call with both your accountant and your tax preparer if they are not the same person. Teleconferencing is a great way to be sure that no write-offs or income were overlooked. Conference calling programs are often free online and easy to use so you will not even have to fork over any money for your conference call.
Discuss when a good time would be for everyone to do a conference call and before you start the conference call make a list of any questions or comments you may have. If you gather all the important information you need, utilize teleconferencing, and use some good old common sense you could end up not only not paying the IRS any money this year but maybe even getting some back from them which is something anyone can appreciate.

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