5 Steps to Take Before You Prepare Your Taxes

Every taxpayer dreads the tax season and filing process. Since nobody seems to enjoy the process, they pay hundreds of dollars to professionals to file tax returns. It is not early to start preparing for the tax season. Leaving things to the last minute will make the whole process even more daunting and stressful.

Even if you will be hiring a professional to complete tax returns, you need to provide certain information and documents to the preparer. In any case, it would not hurt to prepare and get organized.

5 Steps to Take Before You Prepare Your Taxes 

Not sure where to start? Follow the given tips to prepare for the tax season.

Determine How Will You Do Your Taxes

The first step to start tax preparation in Boston is to decide whether to hire a tax preparer or complete tax returns yourself using the software. A person can choose from the following three options 

  • Use Software – If you intend to do your taxes, there are plenty of software available with affordable tax preparation packages. Hire an expensive, robust software package for complex tax issues. Commonly, people use TurboTax, TaxAct, and H&R Block for preparing tax returns.
  • Hire a Tax Preparer – Search online, collect referrals, and hire a tax preparer with PTIN proving that they are authorized to complete and submit tax returns. Conduct an interview, discuss the complexity of your tax return, and inquire about the fee.
  • Manually – Not many people follow this filling process anymore, it involves completing the tax forms manually and submitting tax returns and documents through mail.

Collect Your Documents 

Maintain a filing system and securely save all the documents you received from banks, brokerage firms, employers, and others throughout the year. Be it paper or digital, file your tax documents for easy access during tax time. Moreover, gather receipts to qualify for the standard deduction. If all your documents are organized, it will take less time to prepare the tax return, consequently, lower fees.

 Change Filing Status 

Prior to filing a tax return, change your filing status if you got married, divorced, or had a child. It is also important to inform the authorities when your child reaches over 18 years of age and is no longer a dependent. This will have an effect on your tax forms and the people related to you.

Provide Personal Information 

Provide all the personal information to the tax preparer including your Social Security Number as well as the SSN of each dependent. Moreover, disclose your sources of income, property, and any asset you sold or bought. Plus, tell the amount you received or paid originally for the sale or purchase of assets.

Request an Extension 

Request an extension if the tax issues seem complicated and continue after the filing date. This does not exempt you from paying the estimated tax amount by April. However, you will not have to pay penalties and fines. Fill out the form and submit it on time to qualify for the extension.

Shailendra Kumar

DA50+Guest Post sites

Leave a Reply

Your email address will not be published. Required fields are marked *