No. 1 – Tax Planning is the Key
Keep up with the never-ending modifications to the tax law which underwent even more changes in 2018. It’s imperative to check your withholding now and make any necessary adjustments. This is important because you can end up owing the IRS if your withholdings have been wrong all year. Another problem can arise if you pay too much out of your check each month, allowing the government to use your money for the year instead of having it to use for yourself.
No. 2 – Get Organized
Being organized on the front end will eliminate stress and possible fees on the backend. Make a checklist of all documents and filing dates, print it out and affix it to the front of a manila folder. Gather all W2, 1099 forms etc into the checklist folder. Categorize receipts into business expenses and add them up. Make note of the totals on the front of an envelope and place all receipts in the business receipt envelope. Make sure you have records for any income received from stocks or retirement accounts. Finally, make note of any bank account logins or Quickbooks accounts for your CPA to be able to access reports and statements.
No. 3 – Be Accurate
Make sure to include all relevant dependent tax ID’s in your filing so that your return doesn’t get held up or worse yet, denied. If you are divorced and filing, make certain that you are the parent allowed to claim the children. Only one parent can claim a child as a dependent on a tax filing for the $2,000 child tax credit. New parents should get their child’s social security number filed so it’s ready at tax time.
No. 4 – File On-time
Tax day is April 15, 2019, mark it on your calendar and make sure to file on time to avoid penalties and stress. Form 4868 can be filed for an extension if you’re not able to make the deadline but that will also need to be filed by April 15, 2019. Mark your calendar now and avoid penalties later.
No. 5 – File Electronically
Electronic filing is the way to go for the quickest processing. It takes about three to six weeks to get a return through electronic filing. You need to be organized to file electronically, and you will be if you follow these five tax planning tips. Keep in mind, if you have your return deposited electronically it might take even less time.