Tax preparation is probably not your favorite task. Once you’ve filed, you usually don’t want to think about it again until next year. However, with proper strategies in place, the upcoming filing season will be much easier, and perhaps more lucrative. 

How to Make Tax Preparation Easier

1. Maintain Your Records

You’ll receive deductible receipts throughout the year that need to be saved. As tax season approaches, you’ll decide whether to itemize your deductions or use the standard one. To find out which will provide the greater write-off, add up the itemized deductions and compare it to the standard deduction.

As January approaches, more documents will arrive. They will include a W-2 form if you were employed in the last year. You’ll also receive various 1099 forms, depending on if you’re an employer or an employee. 

Keep a copy of last year’s return, which will help you organize during tax preparation season. You’ll be able to keep track of the documents you have already received and which ones you’re still waiting for.

2. Stay Updated

When the Tax Cuts and Jobs Act was enacted in 2017, substantial changes were introduced to the U.S. tax code, which affects individuals and business owners alike. Some of the old tax breaks you took advantage of in the past are now gone, but there are new ones added that can help save you money. 

3. Prepare for Estimated Taxes

Business owners, independent contractors, and freelancers usually don’t pay income taxes on their earnings. But, you still must file, and if you expect to owe $1,000 or more, the Internal Revenue Service (IRS) will require you to pay estimated taxes quarterly. 

To help you determine how much money you should set aside every quarter, make an appointment with an accountant.  

4. Save More for Retirement 

To help you save for the future, the government offers tax breaks when you contribute more money to your retirement account. If you have a 401(k) or a traditional IRA plan, your contributions count as deductibles on your tax return. 

However, there are contribution and income restrictions on the IRA breaks along with deferral limits on your 401(k). 

Since 1990, the residents of Saint Peters, MO, have relied on William G. Molitor, CPA for their tax preparation needs. Whether you’re filing as an individual or as a business owner, they’ll develop a customized plan to help you get the most out of your taxes. They also offer accounting options that will ensure you’re confident about your finances as you plan for the future. To schedule a free consultation, call (636) 926-0502. For more information on their services, visit their website.