Tax Preparation Tips To Make Tax Season a Breeze
Tax season has officially begun, signifying the start of a new fiscal year for small businesses and individuals alike. Whether you’re hoping for a refund or preparing to write a large check, the process of filing taxes can be frustrating and time-consuming. Want to be an early filer this year? Looking to make the filing process as simple as possible? These tax preparation tips should help you get started.
Organize Your Information in Advance
You’ve been told to get organized before—but have you ever considered writing a tax checklist? Your checklist should include personal information, income adjustments and planned credits. Start by collecting pertinent details from your spouse and dependents. Next, create a file for W-2 forms, 1099 forms, investment income paperwork, business income information and social security benefits. Finally, consider credits that could be earned from eligible education costs, childcare costs, qualified business expenses, medical expenses and theft losses. Consolidating this information may streamline the filing process.
Request W-9 Forms From Contractors
If you’ve invested in contract labor for your business, draft a list of individuals to whom you’ve paid more than $600 throughout the fiscal year. These contractors will need to complete a W-9 form. If you haven’t done so, request that each contractor complete and send a form as soon as possible. In the future, consider requiring a W-9 form before starting a contract. Your accountant should be able to issue a 1099 to each contractor as long as you provide a W-9 form and the total amount paid.
Know Your Deadlines
An integral part of tax preparation is familiarizing yourself with upcoming deadlines. Tax season deadlines vary from year to year. The fiscal year, of course, ends on December 31. In general, you’ll want to send all 1099 forms to contractors by the end of January. The same deadline applies to companies that must send W-2 forms. You should expect to receive most, if not all, forms in the mail by mid-February. After this information has been received, you’ll have until mid-April to file your taxes.
Book Your Meeting Early
If your accountant is experienced, he or she may have numerous clients to serve during tax prep and tax filing season. Book your appointment several weeks or months in advance to ensure a spot on the calendar.
The beginning of the fiscal year is filled with resolutions and goals. For a smooth, comfortable process, make tax preparation one of your top priorities. Your wallet, and your anxiety, might thank you later.