The Do’s And Don’ts Of Tax Preparation
Most people dread it. The 15th of April can be like a guillotine waiting to strike, and for others it may seem like a deadline that can never be reached. But tax day does not need to be that way. In fact, with the proper tax preparation, April 15th can be a day for joy, not for sorrow.
Getting all your paperwork in order is the first step for tax preparedness. Make sure that you have information from all your sources of income. If your employer neglects to send you an earnings statement in a timely fashion — hopefully at some point directly after the New Year — you must make sure that they do, preferably in writing with duplicates made for IRS corroboration in the even that they fail to respond.
Also make sure you know what things can be deducted. In many cases there are work related expenses that you did not even know you had made, or had forgotten about. Think back in your mind about all the things you had to buy for your job in the last year. Do you work in the service industry? Those orthopedic shoes you had to buy are certainly deductible.
Beyond having your paperwork together, it is important to have a firm understanding of who is dependent on whom with your family. Are you the main income earner in the family? That makes you the head of household, and entitled you to certain things that dependents are not entitled to.
And it is very important that you make sure that every wage earner in your family files a tax return. If you are not prepared to file your taxes, you can get in big trouble if the IRS decides to take a closer look at your history.
Sometimes it is possible to get an extension beyond the April 15th tax due date. If you are unprepared to file your taxes, this may be a good idea. But keep in mind that delaying the due date of your taxes does not mean that they go away. You still need to be prepared when the new tax day comes.
Do not let taxes overwhelm you. Get on them early and make sure that you have all your tax forms prepared so that filing will go as easily as possible. And who knows? At the end of the day you may have a check coming your way — if you set about things the right way.