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Getting Ready For the Tax Filing Season

It’s that time of the year when the government puts us under pressure to file our taxes and give them all of the money in our pockets. Depending on where you are in the world, filing taxes can be a painstaking process that becomes even more harrowing when you calculate that you owe thousands of dollars.

My approach to the tax filing season changes every year depending on my mood. In those years, where I have an inner gut feeling that the refund will be awesome, I am eager and anxious to file early. But those years, when I think that I will have a small refund or if I have to pay, I wait until the last minute. This year, I’m feeling good, so I will be filing way in advance of the tax deadline.

For this year’s season, I’ve decided to take my preparation to another level, by being proactive and better organised. Most years, I just give the form a quick glance, check to see what I’m owed or what I owe and click submit. It’s not a good approach and this year I am endeavouring to change that.

Getting Ready for the Tax Filing Season

There are a number of steps that I believe will be helpful as I navigate through this year’s tax filing season. This process can be simplified if you keep track of your income throughout the year.

1. Gather Your Documents

Throughout the year, a robust record keeping system is necessary to keep track of the items that will affect your income tax. When filing, you will need these documents as well as your social security number; tax identification number; banking information; and receipts and documents for charitable deductions. Although tax related information is uploaded to the tax filing portal, you should have copies of all documents that will contribute to your taxes. Remember, you will also need these documents for your spouse and children.

2. Make Note of Your Deductions and Credits

Deductions are the crux of the tax filing process and you should have records for each deduction. According to the Business Insider, there are several deductions that you should be aware of and you should have the records to back them. Some examples of deductions are self-employment expenses; rental property expenses; investments expenses; real estate and property tax records; medical expenses records; childcare expenses; retirement contributions and home repairs as a result of natural disasters.

3. Use Available Resources

There are many guides which help you to get ready for tax filing season. Additionally, local tax agencies, financial institutions and some educational institutions provide free tax clinics where you can get help with tax filing. If you are not filing your taxes on your own, you should start the process as early as possible to avoid the rush of people who may wait until the last minute to file.

4. Decide How You Will File Your Taxes

Many people can file their taxes by themselves and usually do so online. But, if you need help with the process, there are many companies that offer tax preparation services. The ideal approach is to file your taxes early, so that you can avoid bottlenecks that often result in system crashes. And, filing early gives you enough time to take corrective action in the event that something goes wrong.

5. Pay Attention to the Tax Return Deadlines

There are several deadlines which all tax payers should be aware of well in advance of the tax filing season. The tax return deadline is the date that income tax must be filed; this deadline is everyone – those who filed themselves of those who used tax preparation services. Then, there is the deadline for paying tax refunds that are owed. Please be mindful that penalties may be applied if you do not file or pay by the deadlines.

6. Protect Your Personal Information

Because identity theft is a real and present danger, the tax filing process should be done cautiously. You should always file your taxes on the official government website and never through third parties. Also, if you are using a tax preparation service or a friend, please ensure that they are trustworthy. Protect your personal information and never share your financial information on third party websites or companies.

7. Start Planning for Next Year’s Tax Filing Season

Many taxpayers think of the tax filing season as one of the most stressful events in the year. You can make this easy process if you start planning for the next season as early as possible. Although it seems as though something changes every year when it comes to filing taxes, you should keep abreast of the changes; new tax rules and tax reform initiatives that may be implemented throughout the year.