Tax season is almost here! Are you ready? Many people forget about it until it’s too late and spend their days scrambling to collect all the necessary paperwork. However, you don’t need to be frazzled and frustrated with a little bit of planning ahead! The key to successful tax reporting (and avoiding audits!) is to have everything at your fingertips. By preparing ahead of time, you’ll be ready to file your return as soon as you are prompted to do so. The IRS will begin accepting returns around mid-January, so keep that in mind as you plan ahead. Here are some of the top ways to get organized before it’s time to submit those taxes!
File by Your Numbers
The IRS will track all taxpayers through Social Security numbers. If you file your own returns, then you don’t need to worry too much about including your Social Security number. However, if you are using an accountant to handle your taxes, make sure to include that information. Also, include your spouse’s SS number as well if you two file jointly.
Don’t forget your dependents’ ID numbers as well! This includes everyone from the elderly to newborn babies. If your children don’t have Social Security numbers yet, make sure to contact the Social Security Administration as soon as possible. Also, include your daycare service provider’s information as well so that you can get child care credit. Any missing Social Security numbers can lead to trouble, including slowed returns or even a disallowed tax credit.
Income Tax Forms
Think about all the income and employment data you will need in order to correctly file your taxes. You should be receiving your W-2s from your work showing exactly how much you earned in the past year, how much was taxable, and what taxes were withheld. If you have more than one job, make sure to get a W-2 for each one.
For those of you who are independent contractors, your company should send you a Form 1099-MISC. This will tell you your gross earnings. Keep in mind that, for those who are self-employed, tax season takes a bit more preparation. Track all your receipts and documentation for all business expenses, including mileage records, supplies, and even utility bills if you work out of a home office.
Track All Your Assets
Your income isn’t the only thing the IRS cares about. If you have any savings accounts, whether they be for a new house or retirement, the IRS will need to know about them. The interest earned is usually taxable. You should receive a statement from all account holders and official tax forms. Copies of these forms will also be sent to the IRS. Any interest you earned is usually put on Form 1099-INT. If you have started exploring and diving into stocks and mutual funds, you will get Form 1099-DIV for all stock, mutual fund, or money market account.
Make sure to hang on to your end-of-year financial statements to make sure they line up with your official tax documents!
If tax season has come and passed, and now the IRS is attempting to audit you, it’s time to contact an IRS attorney who may be able to assist. Reach out to our team today to schedule your free consultation! We would be happy to discuss your situation, as well as provide legal assistance and advice on how to proceed. For your legal representation, contact Tax Law Offices today. Also, be sure to check back soon for even more tips and tricks to get ready for tax season. We will be posting part two of this series in the near future!