5 Ways To Prepare For Tax Season

Before you prepare your taxes for the upcoming IRS filing deadline of April 15th, taking the time to put some thought into this scary task for many, can save you in the long run.

And if you plan to have a tax preparer or CPA do your tax return, remember that they are busy this time of year. So don’t wait until the last minute to prepare your stuff, and get it all to your preparer.

To help make tax season easier for you, here are my Top 5 Ways To Prepare For Tax Season for the 2014 tax year, or any year to come:

1) Identify all your sources of income.

Before you gather everything you need for your taxes, be sure to make a note of every source of income you have. This would include pay you make from an employer with taxes withheld, that you received tax forms from in the mail.
This would also be any bonuses or extra payments that may have not had tax withholding taken out.

Also be sure to include interest you’ve earned on savings, and any other sources of cash, like selling a piece of property or a home, investment payments, or even those lottery winnings 🙂

2) Make a contribution to your retirement account.

If it looks like you’ll owe money to the IRS on April 15th, a great way to get a significant deduction is by contributing to your retirement account.

Whether it’s a 401K through your employer, or an IRA or even a SEP account if you’re self-employed. You can make a contribution for the 2014 tax year until April 15th. Or if you file for an extension, you have until your due date on October 15.

3) Take a look at your paycheck withholding amount.

If you think you’ll have to pay the IRS this year, you can review your paycheck, and see how much is being withheld from your checks each month.

If you have to pay the IRS, you may want to increase your withholding just enough so you don’t have to pay next year. Just don’t have too much withheld, or you’ll be giving Uncle Sam an interest-free loan!

4) Gather your receipts and credit card year-end statements.

Be sure to claim all the deductions you’re entitled to, by making sure you don’t accidentally forget a pile of receipts. And if you have a business, you should already be using an “expense credit card” to make gathering all your deductions easy when tax time comes around.

5) Think about how you can pay less taxes next year.

There are many ways you can set yourself up to pay less taxes for next year and beyond. You just have to educate yourself on them, then take the necessary steps.

One of the easiest ways to do this is by starting a home business. You’ll get significant deductions and even tax credits, depending on the type of home business you have.

Another great way to ensure you are keeping as much of your hard-earned income as you can, is to secure the services of a CPA and a financial planner. These professionals can look at your tax situation, and propose a plan to protect yourself from the heavy hand of the government, while building your wealth.

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