The following are a few tax tips to consider during this filing season. Enjoy!
- If you don’t know, ask us. Take, for example, if you are unsure if something is deductible then include the receipt with the other papers you usually bring your accountant. Another option is to email us a picture of the receipt with your question. We are always here to help!
- Understand how extensions work and what can be extended. For example, you can extend your date for filing but you cannot extend a date for tax payments. If you don’t pay your taxes by the deadline (April 17th) there will be penalties and interest. To avoid this, make an estimate of your income and expenses. Bring this information to us and we can help you estimate your tax payment.
- A good tip for anything, read it before you sign it. This also applies to your tax return. We prepare an accurate tax return based on the information given to us. But you are ultimately responsible for what is on the return.
- Have you ever wondered how long you should hang on to your tax return? The minimum is three years. This is because, in the case of an audit, the IRS will review the last three years of your financial history. Furthermore, if the IRS finds any under-reported income then may go as far back as seven years.
- It is better to file a tax return even if you cannot pay the money you owe. There are penalties for failure to pay, but generally, there are greater penalties for not filing. Even if you cannot pay, there are still options. You can set up a payment plan with the IRS. Sometimes the IRS will even reduce the payment amount you owe if you contact them.
- Did you know your income is not just the physical money you make? Consider the following situations which count as income:
- If a creditor forgives money you owe and they send you a 1099-C form
- When your boss gives you vacation time as a bonus
- When a bank gives you $100 for opening an account with them
You can visit our Tax Preparation page to learn more about our services!
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