5 Ways to Prepare for Tax Season.

tax season

Tax season can seemingly bring about quite a bit of stress towards the end of March and the beginning of May. Tax preparation in Denver can help you get a jump on being prepared and possibly saving you hundreds of dollars in unnecessary mistakes or late fees. Below you will find our top five tips to help you prepare for tax season so you don’t have to stress.

Gather Your Documents

This should probably go without saying that you shouldn’t walk into your tax preparer’s office empty-handed. Taxes require documentation. By the end of January, you should have received all the necessary documents from your employer, clients, business associates, and any other professional entity necessary for tax purposes. Generally, these forms include a W-2 if you are a salaried employee, 1099 forms if you received other incomes, 1098 if you pay a mortgage, a W-2G if you have gambling winnings and others depending on your income streams. Get it all together, even if you don’t think it’s important.

Collect Your Receipts

If you’re doing itemized deductions this tax season, you’ll need receipts to prove your business expenses. Even if you’re not sure about itemized deductions, bring them to your preparer who can make sure you choose the option that gets you the most money when it comes to deductions. You may find the standard deduction is worth more to you but you won’t know unless you have an itemized list of receipts to show your preparer to give them the full scope.

Take Note of Your Donations

Throughout the year, you might have made donations to charitable causes. Many people forget many of these charitable donations are tax-deductible, meaning you get them back during tax season. If you’ve kept track of your donations that qualify for tax deductions throughout the year, now is the time to use them. Make sure to have an organized list with organizations, amounts, and dates as well as official receipts or confirmations to back the donation claims up.

Decide If You Need an Extension

By law, you are required to file your taxes by mid-April. Though many people get it done well before then, some people require more time due to confusing income streams, amounts of paperwork, or any sort of major life event that will prevent you from filing. If you anticipate needing an extension, get the request in right away and make sure you’re keeping up with other important dates. Late filings can incur heavy penalties and fines that you don’t want to be paying on top of any money you may already owe.

Decide How You Want to Use Your Refund

If you anticipate getting a tax refund, you should figure out now how you’d like it to be utilized. Many people opt to have the lump sum of the refund delivered via check or direct deposit into their accounts. But you can have your refund allocated to an IRA, health savings, or other savings account. You can also have the refund applied to whatever taxes you will owe next year, this is particularly good for anyone who has to pay quarterly taxes. Talk to your tax professional about your tax options. Denver Tax Advisor is ready to help you with your needs come tax season and to make sure you understand everything you need to feel confident in your financial decisions. Contact us today for an appointment.