Steps to Tax Planning
Steps to Tax Planning
The federal government estimates that 60% of individuals use a paid preparer to complete and submit their tax returns. If you us a paid preparer, it’s important to get started right away so you can have a successful tax return experience. This year, federal returns (or applications for an extension) are due on April 18, 2016, Even with this slight delay, you still need to get started promptly.
1. Choose a preparer.
A reputable tax preparer is also a good idea. If you don’t have one, get busy finding one now. A great way to find a preparer is to ask friends and to make a referral. Be sure the person you choose is a qualified tax preparer with a Preparer Tax Identification Number (PTIN). Make sure you inquire about the fees being charged, and steer clear of anyone taking a percentage of your refund. You can search for a tax preparer according to the qualifications you’re looking for.
2. Schedule an appointment.
Be sure that you meet with your preparer and make of list of items you’ll need to bring so that the preparer will have everything need to prepare a complete and accurate return. It is especially important to act promptly if you anticipate a refund so you can receive your money promptly. Waiting to the last minute to schedule an appointment, may cause you to miss out on some advice or course of action that can lower your tax liability.
3. Tax Information.
By the end of January, you should have received various types of information returns that you need. Verify each form making sure that the information matches your own records.
What receipts you’ll need depends on whether you choose to itemize your personal deductions or claim the standard deduction. Obviously, you will choose the filing option that produces the greater write-off. Unfortunately, the only way to know for sure is to determine the amount of your itemized deductions and compare them with your standard deduction amount
5. Charitable Contributions.
If you made donations to charity and itemize your deductions, you’ll need records to claim any write-off. For example, for contributions of $250 or more, you’ll need a written acknowledgment from the charity stating the amount of your gift or contribution, and that you did not receive anything in return. If you do not have an acknowledgment, contact the charity and ask for one. You’ll need the acknowledgement when you file your return. Details about this and other documents can be found in IRS Publication 1771.
6. Tax Law Changes.
You don’t have to become a tax expert but it helps to know about new tax rules. For instance, the individual healthcare mandate created many of the new changes, including new forms for claiming the premium tax credit for eligible individuals who purchased coverage through a government Marketplace (exchange) and for figuring the shared responsibility payment for those who failed to carry coverage and do not qualify for an exemption.
Consulting Services Tax & Accounting is a full service accounting firm. We offer business and personal tax services, including tax services for late filer, non-filers, and for anyone who may have fallen behind in the payments of their tax obligations. If you or your business has been audited and you require representation, you can rely on our expertise with the audits.
Call today and we will be happy to give you a free strategy session before we begin to work together.