Tax season is just around the corner, so it’s time to start thinking about what you’ll need to ensure that this tax return time is smooth and easy. In our last blog post, we mentioned three of the top ways to prepare for the upcoming tax returns. For example, make sure to include your Social Security numbers when you file. Include your income tax forms, and make sure to keep track of all of your assets—not just your income! Today, we are going to share a few more tips and tricks to ensure that you are ready to file your return.
Trim Taxes When Possible
You can start pre-filing preparation now to get ahead! This can help you lower the number on that “taxable income” slot. Many professionals recommend costs related to your home to start. If you are a homeowner, think about the value of your mortgage. Not only does your loan get you into the home, but all the interest you pay on a house is tax-deductible. Lenders will send you a Form 1098 with this amount listed. Keep in mind that mortgage interest isn’t limited to just your primary home. Those with vacation homes can also deduct any interest on these mortgages in separate Form 1098s. Also, don’t forget to include any interest you may have paid for a home equity loan.
Real Estate Tax
Some homeowners don’t know that you can also claim your real estate taxes as a tax deduction. If part of your mortgage has an escrow amount that pays for your yearly real estate taxes, then your lender will send you a Form 1098 to tell you this amount.
Local and state income taxes can also sometimes be deducted, so check for these on your W-2. If you don’t own a home, that’s not an issue. There are other deduction opportunities available in areas where states or counties charge a personal property tax. This includes vehicular taxes! If you own a car and pay taxes on it, make sure your agency sends you a statement so you can include it.
Consider Charity Work and Donations
When you donate money to a qualified charity, make sure to get a note from the group that states if the gift was $250 or more. If you donated less than this, you don’t need a formal receipt. However, you will need something like a credit card statement or canceled check to prove that you did offer this payment in case the IRS has any questions.
If you are donating items rather than money, this can count as a tax write-off too! However, make sure the items are in good shape. The IRS will consider denying any deductions that don’t have much value to them. Donating your trash and trying to write it off isn’t doing anyone any favors, so don’t expect the IRS to accept that.
FInally, you can also get a tax break for volunteering your time to a charity or cause. While there is no set “value” on your time, you can still deduct a certain amount of money for every mile you drive in order to help the charity. You can document this on a calendar on the days that you volunteered.
With all of these things on hand, you will be prepared to handle tax season and get everything filed away! However, make sure that you actually know where to find these things! Once you begin receiving this mail and correspondence, start filing it away. Hold onto necessary receipts and file them where you need. That will make it easier to either do things yourself or hire an accountant to do the work for you.
Reach out to Tax Law Offices today for any legal tax assistance you may need! If you are in need of an IRS tax attorney, our team is here to guide you. Contact us now to schedule your free consultation. The IRS may contact you and request an audit. If this happens, do not panic. Contact legal representation immediately and allow them to guide you through this process. We at Tax Law Offices look forward to working with you and providing the legal counsel you need.