Planning Ahead Can Help You Avoid Tax Problems

Tax Planning Written On PadTaxes are one of those things each year that you would rather not think about until you have to. The problem with that, however, is if you wait until April to think about your taxes, the tax year is over and you could have a big tax problem on your hands that you are unable to do anything about. Planning ahead is the single best way to prevent tax problems. Here are a few tips to help you pre-plan so that, come tax time, you have an easier time this year.

Tips to Avoid Tax Problems Come Tax Time

  1. Keep track of your income and your expenses: In order to maximize your deductions and make sure that the income you claim matches what is submitted to the IRS, it is important to track these things yourself. This is particularly important if you are self employed or have an employment situation that is at all unique (or generates more than 1 W-2). When the income amount on your return does not match the income information that is submitted to the IRS from your employer(s), then the IRS will take notice. You should also keep receipts for all tax deductible expenses throughout the year so that you do not forget to include them come tax time or have to spend hours looking!
  1. Avoid filing Late: The longer you wait to prepare for your taxes the higher the risk that you may not have all of your materials together in time to file by the April 15th deadline. Late filers get noticed by the IRS and accrue penalties that really add insult to injury when it comes to your taxes. You should also avoid the temptation not to file. You may think that the IRS may not realize that your return is missing, but sooner or later, they will realize and your problems will be compounded.
  1. Year end deductions: Whether it is a gift to your favorite charity or donating clothing and household items to a local shelter, these deductions can really help your tax return. You must make all donations no later than the December 31st each year, so again, thinking ahead really benefits you.
  1. Get support if you need it: If your taxes are complex or you just do not have the time or energy to do them yourself, spend some time finding a reputable tax firm that can help you with tax preparation. You will be better off finding a partner for this work before April rolls around as they will need your documentation and some time to work on your return. Keep in mind that there are many scams out there, so ask for references, and looking online for reviews of any company you are considering.

Get The Help You Need With Your Taxes

E&Y Tax Preparation Services will analyze your last year’s tax return for free and help you make the most of your deductions. You will receive the highest standard of tax preparation help and know that when April comes, you will be in the best possible position. Call the team at E&Y Tax Preparation today at (248) 362-1313.