Filing taxes can seem like a daunting prospect. Even if you’re preparing to file a free tax return for the 20th year in a row, the process seems to never get less intimidating. Often, you may worry about whether you’ve done everything right and paid the right amount, fearing that if you haven’t, the IRS will come down on you like a ton of bricks, demanding thousands of dollars. Fortunately, this is rare, but it doesn’t make people less fearful of tax returns and the IRS.
Tax does not need to be a scary business, though. There are plenty of things you can do to help make filing your taxes far easier. If you require a few insider tax tips, read on to find out everything you need to know.
Use a Tax Preparer
If the actual process of filing your taxes is what scares you, you can always reach out to a tax preparer for help. You may be wondering, for example, “What is the Cost of Tax Preparation in Roseville, CA?” Luckily, it’s never too expensive. You’re looking in the range of $2-400, depending on how complex your tax filing needs are. If you have multiple companies or income streams, this could push a little higher, but what you pay will be worth it. This is the most stress-free way of filing your taxes.
See if you Qualify For Free Tax Prep
In some cases, you will be eligible for free or almost free tax preparers. For example, if your income is less than $66,000, you are likely eligible for IRS Free File, a service provided by an army of non-profit tax preparers. At other levels of income, other private companies also offer similar or cheap services. So, if you’re worried and on a relatively low income, it’s worth looking to see if you qualify for help.
Track Receipts (All Year!)
The most stressful part of hitting the April deadline is often receipts. Suddenly, you may find yourself staring at a pile of paperwork that you haven’t batted an eyelid at for months. Avoid adding this unnecessary stress to your tax filing situation by tracking your receipts as and when you receive them. There are so many great receipt tracking apps that file them automatically into categories, helping you quickly fill out your tax expenses on your return.
Record Driving Miles
The same applies to driving miles. Often, people claim their mileage as part of their business expenses. But, it’s often hard to prove what you spent on business trips and what you did not. To make things easier, use your receipt scanning app or a driving-specific app to track the miles or gas purchases that qualify for your tax return.
Use Business Accounts Where Possible
Many of us use the same apps for business and pleasure. This is great for ease of use but can lead to confusing situations when it comes to filing receipts at the end of the tax year. Take Uber or other car services; for example, you may use these to book rides for both business and pleasure. To make things easier, set up a separate business account to switch between when you book different rides. This way, you can easily find the categories when it comes to selecting the appropriate receipts.
Make Spending Simple On One Card
Speaking of appropriate receipts, there’s nothing more confusing than mixing personal and business spending on one card. It’s so easy to set up an online bank account through an app these days that there is no reason for mixing business and personal purchases on one account. Create a separate account for business needs – whether that’s credit or checking – and then all of your expenses will be in one easy-to-read list come tax day.
Seek Extensions When Needed
Finally, if you are having trouble with any of the above, you can always ask the IRS for an extension, either through your tax adviser or on your own. The IRS is usually willing to listen to those who seek extensions, but only if you apply for one before the closing date passes. After this, they are less likely to be interested in helping you! If it looks like you have financial trouble on the horizon, speak to a tax adviser or the IRS right away to try and set an extension or repayment plan into motion. Failing to do so could lead to back taxes, interest, and fines.
These 7 tips should help you prepare for your taxes or find the right individuals to help you do so. As stated at the top, filing your taxes doesn’t need to be scary. Make sure you’re putting a little aside for tax every month, and following the tips above, then you’ll be just fine.
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