The world of taxation is enormous and extensive, ‘tax season’ is never over, instead should always be in our minds. Every ‘situation’ can have multiple angles, and the ultimate goal of any individual or taxpayer should be to conserve wealth. One way of doing this is by reducing overall tax liabilities. This happens with solid tax planning and could expand over many years. Although it can be time consuming, keeping organized and detailed records can save tons of time and money in the long run.
It is worth noting that although a competent tax adviser will know about tax planning techniques and current tax developments, you will be more familiar than an adviser is with your financial affairs and objectives.
Generally, your tax-preparer does not need to see your receipts, but a summary of those receipts (either by hand or computerized). It is in your best interest to keep track of your deductible expenses year round to accurately report that information on your tax returns and save the most money ($Tax Dollars$). This should be done monthly or even weekly. Be in the know with all of your income and expenses from a personal level to a more business capacity.
Relative to how W2’s and 1099’s are distributed, you should prepare your year end documents, also by the end of January.
- Items like medical and dental,
- un-reimbursed employee business expenses such as tools and mileage,
- and charitable contributions are some examples of items on the Schedule A (Itemized Deductions).
Other things to think about….
1. Do you need to adjust or change your exemption amount listed on your W4 form?
2. Are you self-employed or a sub-contractor? Are you keeping your ‘books’ up to date? Do you understand what that entails?
If not, shoot me an e-mail at stephanie@paulinestaxservices.com for some guidance.
3. Make a folder or space in your filing cabinet to gather tax documents, receipts, or notes pertaining to year end tax items so that you don’t forget or leave anything out. However, physically open the mail and verify the information. Shred anything unimportant and put everything else in it’s place.
*Many of my clients bring in a stack of unopened mail for me to open and often times not only does it not mention TAX on the outside of the envelope (even if it does) it’s usually junk mail or some long lost bill they forgot about.
