At Tax Time, Preparation Can Eliminate Frustration
“Be Prepared” is the motto of Boy and Girl Scouts across he nation. It could and should also be the motto of every taxpaying citizen in the country. Why? Because preparation is the key to having a tax season that is as free of frustration and mistakes as possible. In addition, you’ll be assured of getting all of the tax benefits that you’re eligible to receive.
Being prepared also means that you’ll avoid having to file an amended return. And you most certainly will not receive a notice of amendment from the IRS. These notices typically mean that your refund is being reduced or that the amount of taxes you owe is greater than you thought. Of course, the best way to avoid either having to file an amended return or receive a notice of amendment is to work with a reputable tax professional.
I’m offering a list of a few items that will help in your preparation process. Aside from making charitable donations and maximizing your employer matched 401k plan, these items are often neglected altogether.
For starters, make sure the IRS has your correct address.
It seems like a no-brainer, but every year, the IRS reports tens of thousands of refund checks that can’t be delivered because of bad addresses. Incorrect addresses will not only result in failure to deliver any refund by mail, but could also result in you missing important communications from the IRS.
If you are eligible for a tax refund, consider having the amount wired directly into your account via direct deposit. Regardless of how you have your tax refund sent to you, double check to make sure the IRS has your correct address on file.
Gather and categorize all tax-related documents.
Leave nothing to chance. Include any and all receipts for charitable donations, receipts for medical expenses, amounts paid for estimated taxes and amounts paid for educational expenses. When in doubt, include it anyway. Your tax preparer will let you know whether an expense can be included or not.
Often missed deductions.
There are several deductible items that many people are unaware of that you can deduct. For example: Certain expenses incurred for a job search in your present occupation, even if you do not get a job. You cannot deduct expenses if you are looking to change careers or occupations. Nor can you declare expenses if you are looking for a job for the first time or if there was a substantial time lapse between the end of your last job and your subsequent job search.
If your home phone, cell phone and or computer are used for work and they are necessary to produce income, you can deduct the depreciation of each of these items.
Always rely on the current knowledge of your tax professional to determine what deductions apply. Some tax benefits are not as obvious as others and special rules may apply. Working with a reputable tax preparer who stays educated on tax changes and reforms will make your tax season run as smoothly as possible. After all, not one needs more frustration.