Hiring a professional tax preparer may seem costly, but it could save you thousands of dollars in IRS penalties and interest.
A tax expert will be able to identify tax credits you might not know about, steer you away from deductions you might miss and help you develop a long-term plan for your taxes.
1. Be Organized
Before-tax season starts, make sure your personal and business receipts are organized. This will help you get the most out of your deductions and eliminate stress in the tax preparation process.
Whether you are a freelancer, side hustler or small business owner, organizing your receipts is essential for a smooth tax season. Here are some ways to manage your tickets for the best tax savings:
The first step to organizing is to set up a receipt box or folder to keep all your receipts. This can be as simple as a manila envelope or a shoe box.
2. Track Your Expenses and Deductions
Another way to stay organized is to keep track of your expenses throughout the year. This could include your home and office costs, vehicle expenses, education costs, child care, etc.
You can use a spreadsheet or accounting software to keep track of your receipts and expenses. Or you can even take photos of your tickets and store them in a digital expense tracker.
3. Maximize Tax Bill
Whether you’re taking advantage of a free service offered by your employer or going the professional route, there are a few key steps to take to maximize the value of your tax bill. While the cost of taxes can be daunting, there are ways to save money while also saving yourself time and headaches.
For starters, if you’re preparing your taxes for the first time, research before you start. A quick online search should reveal several resources, including free tax preparation software like those from H&R Block, which can help you get the job done for a fraction of the cost.
Finally, don’t forget to bring the proper documentation. Your preparer will need a few things, including your Social Security number, dates of birth for you and your spouse (if you’re married), and any dependents on the previous year’s taxes. Depending on the complexity of your taxes, you may be required to provide additional supporting documents like receipts and invoices to prove that the deductions were legitimate.
The tax preparation process is highly regulated, so you can be sure your preparer has been through the wringer before you walk through their door. By following the tips outlined here, you can save time and money without sacrificing the quality of your return.
Taking your tax return preparation game to the next level involves more than simply checking boxes and answering questions. Fortunately, many tools and tricks help you save big bucks on your taxes. The best way to do this is to make sure you are well-organized and in the know. In the months leading up to tax season, be sure to take the time to research and plan your financial future. This will give you peace of mind when it comes time to file your returns and keep more of your hard-earned cash. .
4. Answer Your Accountant’s Questions Promptly
Answering your accountant’s questions promptly and efficiently will save you time and money. If you don’t answer their question immediately, they may contact you multiple times to get the necessary information. This is time that they can’t use to prepare your tax return, and it will increase their fees.
In addition, it’s essential to pay your tax professional in advance rather than out of pocket. You can use a refund transfer when you e-file your tax return, letting your accountant know they should be paid from your tax refund rather than by check.
The cost of hiring an accountant will depend on several factors, including your tax situation and the experience of the accountant you choose. If you have a short tax return, taxing yourself with tax software may be more affordable. However, if you have complicated returns or a lot of complex deductions, it’s likely more expensive to hire an accountant. You can also shop around for pricing before you hire an accountant so that you can make an informed decision.
5. Don’t Hire a Seasonal Employee
Seasonal employees are a great way to supplement a business’s labor during busy times. These employees are usually paid part-time and can save a company money on payroll taxes by working fewer hours.
However, hiring seasonal workers can also create legal complications for companies. Often, these employees must be classified as part-time and may have to pay income or self-employment taxes.
To avoid these issues, it is essential to hire only qualified employees. It is also important to make sure that these employees understand the work they will be doing and how it will affect their income.
It is also vital to track the time these employees work to ensure they stay within 120 days a year. This will help you to maintain compliance and comply with state and federal employment laws.