Two Words…Tax Time
Ready or not, here it comes! Tax Time…two words that easily define the months leading up to April 15th and for calendar year 2020, April 15th falls on a Wednesday. Even though we know it’s coming year after year; tax season can still be stressful. The annual pressure to collect, organize, and file returns by a deadline often has a certain similarity…waiting until the last minute. How to break the buzzer beater habit when every minute counts? Here are a few ideas that may help turn things around…
Two more words… preparation and organization. In preparation for filing taxes, figuring out what forms you need is a key to a smoother process for both employee and employer. By January 31, 2020 all employers should have distributed W-2 forms to their employees. An employer also has the responsibility of filing identical W-2’s for each employee with the IRS and Social Security Administration, otherwise they will be subjected to heavy penalties for late submissions. The W-2 is the IRS tax form used to report all taxes withheld from wages paid to employees for the prior year.
Another invaluable tool to prepare throughout the year is to designate a single location to store all necessary materials to tell your financial story. Tax forms, social security numbers for self, spouse, and dependents, along with mortgage information, donation receipts, and bank account numbers are instrumental in completing a seamless return. Whether it’s a physical box or desk drawer for paper, or electronic copies of all required documentation in a folder on your computer, having a single source for “all things tax return” will make the filing experience for both you and your accounting professional that much easier.
Organizing deductions may have a huge impact on tax bills and returns. What were your big life events last year? Did you get married? Buy a house? Have or adopt a child? Milestone life events may have a big impact and documenting them with your tax professional may translate into big dollars on your return. Organizing and maintaining documents related to these life events such as marriage or birth certificates, childcare expense receipts, closing paperwork for the new house, or your annual mortgage statement are key when answering these questions on your return. With supporting documentation handy for you or your accounting professional to refer to, possible (sometimes BIG) deductions are less likely to be overlooked.
Like any vacation, annual holiday, job interview, or big event, waiting until the last minute to prepare isn’t usually the best idea. Aside from just calling it spontaneous, the stress from not getting organized ahead of time and throwing caution to the wind can take a toll. Gearing up sooner than later and getting all the ducks in a row now will encourage a more positive outcome while looking forward to two mores words:
By Susan Amsler
February 14, 2020
Randolph Business Resources, LLC.
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