It's that time of the year again. No, not the end of the holiday season, or the start of the new year — it's tax time. So if you're wondering how to prepare for taxes, you're already at an advantage, since most other people procrastinate and panic at the beginning of April, by which time you'll be done! Here are some tips to get you started... these are 7 ways to prepare for tax time...
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1. Make a List, Check It Twice
What will you need to prepare your taxes this year? Make a list and update it frequently, as you think of things... mortgage statement, interest statements, tax documents from employers, and so on...
2. Save Your Receipts
If you're an independent contractor, like me, you'll want to save receipts for everything and anything you think you might be able to claim as a work expense on your taxes. Keep an envelope, keep a spreadsheet, and keep in current.
Frequently asked questions
3. Keep a List of Questions
By the time you make it to your tax preparer (or launch the tax prep software), you'll have a lot of questions... but you may forget them... so keep a list of questions, and be sure to bring it with you when you get started.
4. Don't Put It off
Being prepared for taxes isn't something you can put off til the last minute. Start on January 1, and keep it going until December 31, every year.
5. Grab Last Year's Return
Almost every tax prep provider in the world is going to want to refer to something, somewhere, on your last tax return, so save yourself a trip back home to the filing cabinet by bringing it with you. They may be able to look it up electronically, but why not be on the safe side?
6. Save the Date
Book your appointment with your tax preparer now, rather than waiting til the last minute, so you know you can get the day and time that works best for you... some accountants book quickly, and wouldn't it be awful not to get the one you want? It's almost as bad as getting highlights from someone other than your regular colorist...
7. Know Who to Call
If you're doing your taxes yourself, find the number for an IRS hotline, or for a tax pro, and keep it handy, just in case you truly don't understand something. A phone call now to clear up a question is much easier than an audit later.
Now that you know how best to prepare for taxes, you're golden, right? Right! Which of these tax-prep tips do you use already? Which will you add to your organization plan? Do tell!
Top Photo Credit: shopaholic24seven
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