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How To Get Ready For Tax Season

by Wallace Hanson

Your taxes may not be due yet, but that doesn't mean that you should put them off to the last minute. Use the time given you to carefully prepare and gather all the information you need to effectively complete your taxes, and then give yourself adequate time to complete your taxes.

#1 Sort All of Your Receipts

The first thing you need to do is pull out all of the receipts that you have saved throughout the past year for tax purposes. Once you get all of your receipts together, you are going to want to take your receipts and organize them based on a few main categories under which you can deduct these expenses.

  • Home Office: If you have a home office, gather together all utility bills as well as any one-time expenses, such as paper and envelopes, for your home office deduction.
  • Vehicle Expenses: For your vehicle, you need your license and registration fees and receipts. If you drive for business, you are going to want to get together your log of personal vs business miles, as well as receipts for vehicle maintenance and repair.
  • Childcare: If you pay a child care provider to watch your children full or part-time, make sure that you have a statement of your payment agreement or arrangement. Even better is if you have receipts to show each payment you made your child care provider.
  • Medical Costs: Get together evidence of all medical expenses that you paid out of pocket, such as copays, deductibles, and prescriptions.
  • Donations: If you donated to any charities, make sure you have receipts that properly document your contribution.

Even if you don't think you qualify for a certain deduction, it is best to get together all your receipts for that category. Your tax preparer can then review all your receipts in that category and determine if you qualify for a deduction or credit for those expenses.

#2 Get Together All Formal Paperwork

In addition to receipts, you are also going to need to get together all your formal paperwork as well. Your tax prepare is going to need access to all your tax forms. Of course, your tax preparer will need to see your W2s and 1099 which show your earnings.

Other tax forms that are easier to forget about, but that your tax preparer will also need, include your 1098 for mortgage interest, 1098-E for student loan payments, 1099-B that shows your gains and losses on your investments. If you are retired, your tax preparer will also need to see things such as your 1099-R, which shows the money you have gotten from your pension/retirement account and 1099-SA for Social Security.

The tax filing deadline may still be far away, but it is time to gather all your receipts and tax documents and get them ready to give your tax preparer. Try to give these documents to your tax preparer as far in advance as possible.

Speak with a business like Hough & Co CPA to learn more.