With tax time right around the corner, it’s important to do what you can to get ready. You don’t want to push everything off and wait until the last minutes. Besides looking at special circumstances, such as sales tax nexus, there are a few other things you’ll want to do to ensure you’re ready for the season. With that said, here are 5 ways you can prepare for the upcoming tax season.
Consider Donations
The first thing you want to do is look at all the donations you’ve done over the past year. This includes things like monetary donations to charities, as well as donations to places like Goodwill. It’s important to look at these because you can actually get some tax benefits from the donations. In order to get the best tax benefits or breaks, make sure you have everything recorded and receipts written from the organization about the donation.
Save Documentation
It’s extremely important to save documentation as much as possible. Not only does this include things from your job, but you also want to make sure you have documentation for any deductions you might have, including sales tax deduction. You’ll have to make sure the receipt is for something that can be deducted, but it’s important to save everything just in case. The majority of deductions are going to be for things related to work, such as uniforms or services done to your vehicle.
Research New Tax Rules
With so many laws pertaining to tax time, like the sales tax law, you want to make sure you research any new tax laws that might relate to your state or personal situation. By doing this, you’ll be able to learn about things like new credits, deadlines and requirements for certain situations. Even if there aren’t any new tax laws, it’s important to double check just to make sure. It’s definitely better to be safe than sorry in that situation.
Record all Income Sources
You’ll also want to make sure you record all income sources. Since most normal jobs that require a W2 will be recorded automatically, this mostly relates to self employment or any income that you get that isn’t recorded. It might not seem like a big deal, but you could end up being in a lot of trouble if you purposely leave out any income information. Depending on how much you make, you might even get some extra credits or tax breaks. Some places only require you to file if you’ve made a certain amount, so make sure you know the rules.
Review Circumstances
Finally, make sure you review your circumstances. Every year, you have to select a few different options that explain your situation. You want to make sure you look and see if anything new describes you. This includes things like marriage, home purchases and having a new baby.
Now that you know some tips to help you get prepared, including special circumstances like sales tax nexus, you should be ready to get everything filed with little to no issues. It’s important to understand everything you need to do before you jump in to help ensure that there aren’t any hangups or errors when you actually file. If need be, try talking to a professional to see if they can help you or if they’ll look over everything and make sure things are correct before you do the final submission.