Yes, it is only the beginning of July, but guess what that means? Tax season is just right around the corner! A lot of people really dread tax season for a few reasons. The first reason is that tax season usually requires a lot of work. People scramble around to dig up old receipts, documents, and records, and it drives them crazy. It limits the actual work that they can do because they are focused on working on getting their lives ready for tax day. The second reason people hate it so much is that usually, they owe the IRS money and who wants to pay up that much at the beginning of spring? Not me, I know that is for sure! But, what if tax season did not have to be as stressful? There is a way, you guys, and I’m here to help you make it less stressful for you!
Document everything from day one
I know that all of you keep the necessary receipts, documents, forms, and records you receive that are needed for your taxes, but if you take those receipts and actually record them from day one, it makes it so much easier. What I mean by this is taking your receipts and writing them down. It doesn’t matter if you do it on paper, excel, or on an app, but either way – record it all for yourself (or for your CPA). It will make it so much easier! Christian Berger, CPA (based out of Atlanta, Georgia) says that he prefers either an excel spreadsheet, or a PDF from a phone app, instead of paper. He has to go back in and do all the calculations himself, so to save time and effort, a computer doc is easier so that it is quick to edit vs. a paper document where he has to re-enter everything (on the computer) again. So, from day one, every receipt, payment, etc. that needs to be documented should be entered. This will save you time at the end of the year and it will make your CPA very happy (so that they do not have to do ALL of the work for you). U.S. News says, “The tax deadline and filing your return might be behind you, but your tax responsibility isn’t really over until you begin to organize your documents for next year. Staying organized even after your taxes have been filed will make your life a lot easier in the future – especially when life events like buying a home or refinancing your mortgage require you to show past tax returns, W-2s and other tax-related documents. Preparing your documents now will also save you time and money when it’s time to file next year. The Internal Revenue Service recommends taxpayers keep their returns and any supporting documentation for three years after the date of filing; after that, the statute of limitations for an IRS audit expires in most cases.”
Know your tax deductions
You can figure out your tax deductions on your own, but it can get very complex, especially if you have a medical expense deduction. With so many different incentives, strategies, and efficiencies, it is usually better to let a professional handle the work for you so that you do not break any laws and you get the most bang for your buck. Engineered Tax Services, an engineering firm based Nationally was founded by Julio P. Gonzalez who “saw the need for a company that could provide services to CPA firms, business owners, and commercial property owners to utilize specialty tax incentives that were previously available only to Big 4 accounting firms and Top 100 corporations. His vision encompassed a way to allow clients the utilization of tax incentives that could increase cash flow, expand service offerings, retain competitive advantage, and provide all of these consultative services under one roof.” Mr. Gonzalez accomplished this vision by creating Engineered Tax Services, which now offers tax strategies to CPAs, real estate investors, manufactures, architects, engineers, and designers. Engineered Tax Services is not only valuable to their clients. They are also valuable and very into supporting their surrounding community. They have pledged support, donations, and campaigns to aid the school, dedicated teachers, and students of Roosevelt Elementary Schools and will match any donation up to $5,000. If you are in need of tax efficiencies, incentives, & credit help, or have any questions, I definitely recommend checking out Engineered Tax Services.
Figure out your tax estimate(s)
I personally prefer to do an estimate each quarter, so I can stay on track and know how much I *might* owe at the end of this year. This protects me when it comes to owing money, instead of shelling out a big chunk of money when I am not expecting it at all. This is also a great time to get your finances in order. If you are going to owe money, how are you going to pay the IRS? Do you have the cash, or are you going to make payments? Figure it out and talk with your CPA or financial advisor about ways that you can lower your payment because it is possible!