Mastering Tax Preparation: A Simple Guide to Tax Planning and Preparation

It’s time to file taxes or prepare tax documents for your tax preparer. During tax season, many individuals and businesses find themselves overwhelmed and anxious about getting things done. We get it! Tax planning and preparation can be a little scary, but there are plenty of tips and tricks to help make it a little less stressful for you. 

 

Here, we will walk you through some simple but essential steps that you can use to prepare for your tax season experience. 

 

1. Be Familiar with Your Tax Responsibility

 

You don’t need to go figure out all the tax laws and details to start preparing for taxes. If you use an accountant, they are responsible for knowing those things. And if you use a tax software for simple returns, those are usually pretty good at walking you through everything you need. 

 

That being said, it’s a good idea to be familiar with your responsibilities as a taxpayer. What does or does not apply to you? Every situation is unique. Consider your situation. Are you a small business owner, do you do contract work, or do you have all of your W-2s from working with an employer? 

 

Get to know the deadlines for filing, making payments, and how that applies to your situation. This is your starting point. 

 

2. Get the Paperwork Organized

 

Getting organized is one of the hardest things you will have to do here. As you receive any type of tax statements, file them all together. Create a checklist so you know where  tax documents should come from, which will help you follow up if you don’t receive something. 

 

Here are some examples:

 

• Income statement
• Interest statements
• W-2 wage statement
• Insurance statements
• Investment statements
• Deductible expenses

 

Did you take funds out of a retirement plan? Did you have more than one employer? Do you have investment accounts? All of these things will have their own statements, and you will need copies of them for your tax records. 

 

Good recordkeeping and organization help tremendously here. Put all of your tax stuff together. 

 

3. Choose a Preparation Method

 

When it comes to preparing your taxes, there are multiple methods available. You can go with DIY software, use a trained tax professional, or even file a good old paper return if you prefer. There are pros and cons to each solution. It’s also important to know that if you have a complex or complicated tax situation, you probably don’t want to handle filing on your own. This is why professional tax preparation services exist for our benefit. 

 

If you have a simple return, the various tax software options can be very helpful. They are programmed to walk you through each piece and allow you to input the numbers from your statements. Paper filing is far more challenging, but some people enjoy the challenge. 

 

Choose what works for you. 

 

4. Review and Double Check the Details

 

Whether you DIY your taxes or hire someone to handle them for you, it’s a good idea to review the details before you sign and file. In an accounting office, they likely have checks and balances in place so another set of eyes reviews the documents before they are submitted to you. This helps to find any possible errors on the return before filing. 

 

Always make sure appropriate documentation is there and nothing is missed or entered incorrectly. Errors can cause delays or even trigger an audit from the IRS. 

 

5. Use Electronic Submission When Available

 

If you can file electronically, that is the best choice. It’s quick, convenient, and you don’t have to worry about paperwork being lost in the mail. There are some tax situations in which you are required to mail the return, but your accountant or tax software can walk you through the process. 

 

If you’re expecting a refund, filing electronically allows much faster processing for that as well. 

 

6. Start Planning Early for Next Year

 

Every year, it’s the same scenario. You dread tax season, and you put it off until the last minute. It would simplify things substantially if you start getting organized from the beginning. When you have a receipt for a deduction or you get a form that applies to taxes, just put it in a folder. 

 

When you plan ahead and organize from the outset, it makes things a lot easier when tax time rolls around. Your tax situation may change through the year, but planning ahead and being aware will help preparation and planning be less of a burden overall. Create your tax file and put things in there as they occur. When tax time comes around, you will feel relieved at how this can simplify things. 

 

Let Us Handle Tax Preparation and Planning with You! 

 

While you will always have some responsibility for gathering documents and providing them to an accountant, hiring a professional tax preparer makes your life so much easier. Tax codes and regulations are overwhelming, and they are always changing. You don’t have to be the one to try to keep up with all of those details. Instead, you can compile your records, receipts, and documents and bring them to us. We can take it from there! 

 

You are not alone during tax season. Set yourself up for success with some simple planning and organization. Find a professional tax preparation business you can trust and work alongside them to make your tax prep so much smoother and easier. 

 

At Katherine M. Johnson, CPA, we take great pride in providing quality service and care for each of our clients. Let us help you with your tax planning and preparation needs. Contact us today for a free consultation!