Procrastination: it’s a habit we can all fall into, especially when it involves tasks that we are not so fond of. Doing your taxes is one of these tasks that often gets pushed back until the very last moment. If you are one of these last minute filers, this post is for you. Here are some tax preparation tips to help you file efficiently, even if it’s in the eleventh hour.
Prepare Financial Reports
If you are filing as an individual, not a corporation, then preparing financial reports is not necessarily difficult. Often, a bank statement and records from the previous year will show a fairly accurate summary of your income and expenses, however, more details may be ideal. Formal records of revenue received, detailed expense reports, and copies of your receipts will be extremely useful if you are audited.
Gather All Documents
Whether you are a full-time or part-time W2 employee, or you are an independent contractor who receives 1099s instead, ensure that you have gathered all of your necessary tax documents before beginning the tax filing process. Having everything on hand makes filing your taxes a seamless and relatively stress-free experience. If you are a 1099 contractor, verify that you have documents from all of your contracts and jobs throughout the tax year, and be sure to claim all of your income accurately.
Look Into Your Deductions
Depending on your type of employment, there may be a variety of deductions that are available for you to utilize. Prior to completing your tax filing, look into these deductions to see what one(s) you qualify for, and how much money you could be saving. If you use a personal car for work transportation or other business purposes, you may be able to claim mileage, gas expenses, insurance, maintenance costs, and more. Be wary of what deductions and expense calculation methods you use for this, however, as you often will need to use the same method throughout the lifetime of the vehicle you are claiming as a deduction. Weigh the pros and cons of each method, and if you have further questions about which one you should utilize, contact the tax pros, and we can help!
Take Your Time
While it is tempting to hurry through your tax filing just to be done with them, this can often lead to mistakes, which end up costing you more time and potentially money in the long run. Not allocating the proper amount of time to your taxes can mean missed deductions, additional expenses, or an increased chance of being audited. Take the time to thoroughly prepare and review your tax documents, and consider hiring a professional to assist you if needed as well. All of this can ensure that you are utilizing your maximum deductions and filing your taxes as accurately as possible.
Ask for an Extension
If there is truly not enough time for you to get everything you need done to file your taxes on time, you can request an extension to the deadline. This pushes the deadline back by six months, allowing you plenty of time to get everything in order to file later in the year. It is worth noting that this extension is simply for the filing deadline, and does not extend the amount of time that you have to pay back the taxes that you owe. If you push your tax filing deadline back, you may end up paying higher monthly amounts if you owe back taxes.
Taxes filed electronically often take less time to process than ones that are mailed in. In last minute circumstances, it may be far more efficient to utilize an electronic filing service, or to call in professional help. This speeds the entire process up, and can assist with finding potential errors in your tax documents.
If you are a procrastination professional when it comes to filing your taxes, try your hand at some of these tips and tricks to make the process as pain free as possible. Last minute tax preparation does not have to be a catastrophe. Take the time to get it done, and do it right the first time. As always, if you would like professional assistance with your tax preparation, we have a team of tax strategists and preparers ready to help however we can. Reach out to us today!