The more preparation you put into your tax prep year around, the more headaches you can save yourself come tax day. Taxes can seem complicated and overwhelming; the type of thing to avoid thinking about to the very last minute, but with proper planning, taxes can be a breeze. Here a few easy tips that you can follow year round to make tax time as easy and pain free as possible.
First, you can start by developing a habit of checking in on your finances monthly. By multiplying your monthly income by twelve, you can estimate if you will be in a higher or lower bracket come tax time. If you can tell that you will be making more money, enough to qualify for a different bracket, it may be wise to change your withholding status so that you don’t end up owing any money to the federal or your specific state. If you believe that you will be making less, enough to qualify for a lower tax bracket, you can still change your withholding status, but it may be best to wait a couple months in case you end up earning more so that you won’t end up owing later in the year.
If you’re married, it is important to discuss taxes with your spouse so that you both have the correct amount withheld. This is all to avoid a bad surprise come tax time. This can became a part of your monthly income audit. If you plan on using certain expenses as deduction, make sure to save the receipts. You should put all receipts of expenses you plan to use as deductions in one special place so that you don’t end up losing them. Some examples of expenses that may count for deductions are utility bills for home offices, business use of a car and charitable donations.
It can be a good idea, especially if you have questions or concerns, to check in with a financial adviser a couple of times a year instead of just during tax season. If you’re looking for an accounting firm in Los Angeles for tax preparation in Los Angeles, Capital Financial Network is the best place to go to get help year round preparing for your taxes and financially in general. A financial advisor can help you determine unknown deductions as well as the correct amounts to withhold. It’s important to have a reputable and reliable account firm in your area.