Preparing For Tax Season
Every year we all look forward to the one guaranteed time that most Americans will get some of their hard-working earnings back in repayment. This time of the year is known as tax season.
Tax season is right around the corner and it's time to start preparing! Taxes are something that you will have to deal with for the rest of your life, so it's important to get them done and done correctly. Taxes can be a nuisance, but there are many things you should do before tax season begins.
This blog shares 6 quick easy tips that you can use to prepare for tax season so that everything goes smoothly.
Tax Preparation Checklist:
Gather Important Tax Documents -
Get organized by gathering those documents now. You can create a folder or basket where you store documents until you’re ready to use them.
Gather Information About Dependents -
Information such as the names and Social Security numbers of any dependents included on your tax returns. If someone else is able to claim one of your dependents on their return, you also need to know that information.
Double-Check Personal Information With Your Employer -
Whether your employer sends your W-2 early or waits until the last day, you could receive it late if your employer doesn’t have the right address. To avoid this issue, check with HR to ensure all your information is up to date. (NOTE: Your employer has until the last day of January to produce your W-2 Forms)
Plan Ahead If You Might Owe Taxes -
One of the best ways to keep yourself from becoming delinquent is to plan ahead if you think you might owe taxes. As of December 2021, the 2022 federal tax deadline is April 18. This means you must file and pay taxes due by April 18.
Do Research on Professional Tax Preparers -
Not everyone feels they can handle the paperwork and administrative side to completing taxes, That's fine, that's why we have tax professionals. The one thing we advise is to make sure If you choose a tax professional, that they have a valid Preparer Tax Identification Number. This indicates that they’re authorized to file federal tax returns on behalf of others.
Finalize Contributions for the Year -
December is a great time to finalize contributions to retirement plans for the year. You can deposit as much as $6,000 into your IRA for 2021. If you’re older than 50, that amount is $7,000 to allow for catch-up contributions. Those contributions may be tax-deductible, depending on your situation.
All of these quick tips will help prepare you for the upcoming tax season. The best thing to do is to make sure that you stay up to date on news from the IRS to assure you are always ready and equipped for every tax season.
When it's time to get your tax refund, we all want that to be a smooth process so make sure you follow this list to have the tax season experience you deserve.