Tax Day may seem like it’s still too far away to worry about. But, it’s never too late to ensure that your finances are in order so that you are prepared for the biggest return and most advantages possible. Here are some tips from specialists at https://denvertaxadvisor.com/ for how you can start preparing for your taxes now.
Make sure you are withholding enough
According to a recent report, more than 20 percent of taxpayers do not withhold enough and therefore owe money with tax season comes around.
If you don’t want to find yourself in this situation, you can use the Internal Revenue Service (IRS) Tax Withholding Estimator tool to determine the right amount of tax to have withheld from your paycheck. If you find that you are not withholding enough, you can submit a new Form W-4 to your employer to correct your withholding.
If you receive a substantial amount of non-wage income like self-employment income, investment income, taxable Social Security benefits and in some instances, pension and annuity income you should make quarterly estimated tax payments. You can learn more about your options for estimated tax payments on the IRS website.
Find a certified public accountant (CPA)
If you have complicated finances or have had a significant life change over the previous year — you’ve gotten married, you’ve had children, you’ve bought a home or started a business — you may want to enlist the services of a CPA that you trust and has a good reputation. Ask your family, friends, or colleagues for help identifying the right person.
Then meet with them and ask questions about how they work and what their take is on your situation. Hiring them now will help ensure you are ready for tax season and the accountant can also help you get your information and any paperwork organized.
Look for any last-minute deductions that could benefit you.
At the end of the year, you should look for any last-minute deductions that could help to lower your tax bill. Contributing to charity is one of the best ways to do this — and it will ensure you’re helping out a good cause. Your accountant can help to point you to any possibilities for deductions throughout the year.
Tax season can be stressful. But, by preparing yourself — and your finances — now, you are sure to be in a better position with Tax Day comes around next year.
