Here are 10 steps to maximize your tax preparation for next tax season.
1. Choose a great preparer.
If you don’t currently have a tax preparer, now’s the best time to get out and locate one. Your local neighborhood company that specializes in tax preparation services is a good place to start looking. Make sure that the individual you select has a Preparer Tax Identification Number (PTIN) demonstrating they are indeed authorized to prepare federal income tax returns. Make sure you also inquire about the fees they charge, which typically depend on the overall complexity of your return; make sure to avoid companies that take a percentage of your tax refund.
2. Set up an appointment.
The faster you get together with your tax preparer, the faster you can start the process of getting your final tax return in order. It is extremely vital to act right away if you are expecting a refund so you can get your funds as fast as possible.
3. Get your information returns together.
Towards the end of January in your tax year, you should collect different categories of information returns that you require for your return. For every single form, check to make sure the information lines up with your own records.
4. Gather your receipts.
If you choose to compile your line items as deductions then you need to make sure that the total amount exceeds your personal deduction.If the amount doesn’t pencil out then it can be a lost cause. Make sure your math is correct.
5. Include records for charitable contributions.
Make sure you have a receipt from each and every charitable donation you’ve made. If you fail to include the name of the charity and the amount then you are out of luck as far as proof to the IRS.
6. Brace yourself for tax law changes.
The IRS and the US government are always updating their regulations. Always be in the know and don’t get caught off guard. A tax preparation service will always have you covered with regards to any future changes.
7. Keep a list of personal information.
Have your social security information ready to go as well as your spouse or any dependents you are claiming on your tax return. Also, have all records regarding properties you may own or investment profiles.
8. Determine whether it’s best to file an extension.
If you require more time to get all these tasks in order, you can ask for an extension to October 15, 2016. This will negate any late-filing penalties. You cannot extend beyond April 18 for paying the tax that is due to the IRS.
9. Decide what to do about a refund.
If you are expecting to get a refund on your tax return make sure you know exactly what you are going to do with the money. Having a financial plan is crucial for your own long-term security.
10. Get a copy of last year’s return.
If you used a tax preparation service last year then they most likely with have all your previous files on hand which will speed up the process this filing period.