How To Prepare For The Next Tax Season

Just because tax season is over, doesn’t mean taxpayers can now take it easy. Some may have their tax returns rejected while others may be subjected to a federal or state tax audit. Errors on one’s tax return can be as simple as a typo error in one’s name or transposed digits in your birth date or SSN. Mistakes can also be as grave as failing to report your income properly. All these can lead to a bigger problem with tax authorities. The good news is, these inaccuracies can be avoided and it all starts with you.

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The time is NOW!

Preparedness takes away much of the stress during tax season. The thing is, most taxpayers don’t prep up until tax season is already upon us.

Problems stem from one’s tendency to procrastinate. Whether you are filing as an individual or a small business, keep in mind that the accuracy and correctness of your tax return rely heavily on all the information that you have gathered throughout the year such as income and expense-related documents, receipts, financial statements, and personal information details.

Do not wait until the next tax season before you start gathering and organizing your records. Whether you are following the fiscal year or the calendar year, be diligent in keeping your records organized in a neat file the whole year round. When you have all your records organized, it lowers your chances of missing out on necessary income and expenses information that you need to declare in your returns.

Update your personal records

Aside from diligently putting your financial records in order, you must also keep your personal records up to date. Any change in your status must be declared accordingly, whether you are newly married or just got divorced. This is especially important for couples who are filing taxes jointly as both husband and wife are fully responsible for the accuracy and completeness of their tax return.

It would also help you a great deal to list down your personal information as well as that of your dependents. You may know your Social Security number by heart and can recite all your dependents’ birth dates in your sleep, but when it comes to filing your tax returns, you are just one digit away from committing an error. It’s so easy to transpose numbers and this often happens when one is already in haste to finish filling out the forms.

You don’t have to carry your list around you all the time but having an updated list of your and your dependent’s personal information when you are filing your returns will ensure that you get this part correctly and lower your chances of committing an error that may cause for your return to be rejected.

Know the impacts of the GOP Tax Bill

It would be beneficial on your part to know about the tax laws. As we all know, the GOP Tax Bill brought in a lot of amendments. These changes affect you depending on your personal circumstance: how much you earn, how many children you have, how much you pay state or local taxes, how much you pay in mortgage interest, and more. You don’t have to master the new tax laws. Arm yourself with basic knowledge so you can start planning for the next tax season.

Meet with your tax preparer.

Not all tax professionals can be a tax preparer. They have to meet the qualifications and proficiency requirements set by the IRS. If you don’t have a tax preparer yet, the best place to search for one is the IRS’s Online Directory of Tax Return Preparers. Choose a reputable tax relief company that employs experienced enrolled agents, tax attorneys, and CPAs to do the job for you. Once you have selected a tax professional who will prepare your income tax returns on your behalf, you start the process and discuss the details such as your eligibility for certain deductibles and other tax-related matters that you may have in the past.

 

Final word

As we all know, errors in one’s tax return, whether committed deliberately or unintentionally may lead to hefty fines being slapped at you by federal and state tax authorities. But the tax season need not be a stressful experience for individuals and small business owners alike, nor does it have to end with your returns being rejected and finding yourself with a huge tax debt. Being diligent in organizing with your receipts and other financial documents all year round and having a tax preparer that you can count on can take that heavy burden off your back and make this dreaded season such a pleasant one.

 

Sources:

Why People Need Tax Debt Relief And How We Can Help

https://www.investopedia.com/articles/pf/07/tax_prep.asp

 

Good Debt Gone Bad

The word debt itself makes a lot of people shudder. Why? Because there are millions out there who are currently caught in a debt trap that doesn’t seem to have a way out.

Debt in itself is not a bad thing. It is, after all, money borrowed to serve a purpose. Each debtor has their reasons why they take out a loan. Perhaps it is to fund a new start-up business or simply to make ends meet. But even if one has all the intentions to use that borrowed money for a good cause, a good debt can still go bad and derail one’s finances if mishandled.

 

Student Loans

Student loans are considered as a good debt because it is used to fund the first big investment anyone can have: education. Every single penny spent on education is money well-spent, and a “return on investment” is expected once the student graduates from college and lands a lucrative job in his or her chosen field.

Student loans must only be used to cover school-related expenses. The sad fact is that there are many college students out there who take out more student loans than what they actually need so they end up with a debt of astronomical proportions by the time they finish college.

 

Business Loans

As its name already indicates, business loans are specifically intended for business purposes. Whether it is just a startup or an already thriving business that needs more funding for whatever reason the business owner has, say, a planned expansion. But in order for a business owner to pay for that loan, the business must first generate income. Every business has its risk so it is best for any business owner to conduct a study first before taking out a loan to see whether or not it will do them any good.

 

Credit Cards

Credit cards debt is one of the top reasons why millions of Americans are deep in debt right now. Often considered as a bad debt because a cardholder cannot expect any return on investment on his or her purchases through a credit card, these plastics are actually a friend and a very useful tool when used prudently. But if a cardholder gets himself or herself trapped in that vicious minimum payment cycle thinking only of maintaining a good credit standing by meeting the required monthly minimum religiously, then it sure is a clear recipe for financial disaster.

 

Payday Loans

This type of loan is a short-term loan that comes with a high interest. Payday loans are supposed to bridge the gap to your next payday and are only good for those “emergency cases” where the borrower is left with no other financial options. Payday loans are especially attractive to those who already have bad credit and in need of money because it doesn’t require the traditional credit check. It is important, however, to pay off these loans at the end of its term, otherwise, the borrower may be charged with additional fees, and the high-interest rate can bury an already financially struggling person deeper in debt.

 

The Bottomline

 

It is essential to exercise wisdom and caution when taking out a loan. Mishandled funds can lead anyone to a potential financial ruin. So it is best to spend that borrowed money wisely and take loans only when it is needed. Also, do not hesitate to learn more about what you are signing up for. Ask questions to your creditor and make sure to read through the agreement to guarantee that everything is understood and no fine prints are left unread.

For debts that have already gone bad, debt relief programs are available for those who are in need to have their financial burdens taken care off. Enlist the help of a trusted debt relief company to know what options you can take to best resolve a financial liability without having the need to file for bankruptcy. These nuggets of knowledge, along with the wise handling of finances will help avert any financial disaster imaginable.

 

For more information about debt relief, visit:

Debt Settlement From A Debt Settlement Company

http://www.advisoryhq.com/articles/curadebt-reviews/