Beginning tax prep early may save you from a few headaches down the road.
Putting off tax prep until tax season rolls around is never a smart idea. However, for many filers, this is their reality each year. Instead of organizing their taxes during the year, most haphazardly prepare them right before the deadline. Don’t follow this poor example. Here is why it’s never too early to start preparing your taxes for next year.
Keep Deductions in Order
Long gone are the days of storing receipts for tax deductions in a shoebox. But, if you don’t prepare your taxes throughout the year, you may find yourself guilty of this antiquated, unreliable practice. Instead, it’s best to keep your deductions and expenses in order as they occur.
Why is this important? You don’t want to end up overpaying Uncle Sam. By keeping accurate records of every expense, you’ll have everything in order when the federal deadline comes around. Remember, the early bird catches the worm, or in this case, the best tax breaks.
Owe Less Come Tax Season
There’s nothing more stressful than finding out you owe the government a hefty sum come tax season. Starting your tax preparation well before the deadline is the best way to keep this from happening to you. Early preparation gives you a clear picture of how much money you’re making. You can also choose to begin making payments now.
Filing quarterly taxes is a surefire way to owe less in April. Instead of paying your taxes at once, year-round prep will help you make estimated payments each quarter. Paying these small amounts will greatly lower your tax burden in the long run. Plus, you won’t have to worry about receiving a penalty from the IRS for underpayment.
Reduce Your Risk of an Audit
An audit is the fear of every taxpayer. There are ways to reduce the chances of you getting one, however. Too many filers throw their taxes together at the very last minute. What’s wrong with this? You’re more likely to make miscalculations or have data entry mistakes. Those who begin preparing their taxes well in advance usually have fewer errors, reducing their overall audit risk.
Maintain a Working Relationship with a Tax Preparer
If you only do your taxes once a year, chances are you work with a different preparer every time. This means the person helping you is unfamiliar with your tax situation. They only see a snapshot of your taxes and not the full picture. But, by continuing to work with a tax preparer every season, you’ll develop a relationship with someone who knows your tax situation. They will keep your best interest at heart, and they will make sure you get the most deductions and incentives when you file.
Start Preparing Your Taxes Early with a Local Professional
Don’t wait until the final countdown to begin your tax prep. The experts at Incompass Tax, Estate & Business Solutions want to help prepare your taxes all year long. With over 29 years of experience, we have seen almost every tax scenario imaginable. We will make sure you pay your fair share and not a penny more. Contact us if you want to begin your tax prep early so that you can sit back and relax while everyone else stresses out during tax season.