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Making the Most of Your Tax Preparation

As tax season approaches, people all over the country are already becoming overwhelmed with anxiety. No one likes tax season. Despite the fact that the majority of earners in America receive refunds, there is still nothing fun about filing your taxes. Here are a few tips to help you prepare for tax season and reduce some of the stress associated with this time of year.

Top Five Tax Preparation Tips

  1. Gather Pertinent Documents- It is helpful to keep all of your tax related documents in one file. This includes your W-2 forms, 1099 forms, K-1 forms, if you have them, 5495 forms, and 1098 forms for home mortgage interest deductions. You can also keep copies of tax filings from previous years in this file, since most people have similar returns from one year to the next.
  2. Do Your Research- Tax laws are constantly changing. While your final filing will likely be similar to your filing from last year, there may be some changes to specific taxable situations that are relevant to you. A little research could help you receive a larger return.
  3. Fully Fund Your IRAs and SEPs- Money invested into IRA and SEP accounts are not taxed until that money is withdrawn, so if you max out the limits of these accounts, you will be able to avoid paying taxes on those earnings.
  4. File as Early as Possible- You can't avoid filing your taxes, so get it over with as early as possible. The sooner you file, the sooner you will receive your return. This allows you to invest that money quickly, yielding you more earnings in interest than you would if you waited until the deadline to file.

When in doubt, contact a professional with experience when it comes to tax preparation. Whether you need advice regarding how to file on your own, or you would like to leave the job up to someone else, the professionals at Litzler, Segner, Shaw, & McKenney have the knowledge and expertise to help you tackle all of your tax issues.