It’s hard to believe it but it’s already time to start thinking of tax time. As Meryl Streep once said, “Start by starting.” The best way to get started is simply by starting! Be proactive this tax season, know what you need to do, do your research, and stay in the know.
Make a plan.
As with any project, a plan is a must! Determine the steps necessary for a successful tax season (don’t worry, we share some below). Once you create your plan, stick to it.
Know personal information.
Make sure you know all personal information for yourself and any minors you may be filing for. This includes their full legal name, Social Security number, birth date, and home address. If you need to h
Tax season is officially in full swing, with January 24 being the first day you could file your taxes for 2021. The final day to submit taxes is Monday, April 18, as April 15 is Emancipation Day and also a national holiday in Washington D.C. With tax filing being delayed last year and Tax Day extensions the last two years, it’s important to prepare as best you can for a smooth tax season.
The first step? Start collecting tax documents as they come in the mail. Save them in a stack somewhere they can be safe but also easily accessible. Depending on your situation from the past year, there are various forms to be on the lookout for. It’s important not to start your taxes until you have all the forms necessary.
Determine how you will be filing this yea
We may have just rang in the New Year, but it’s time to start thinking of tax season! Depending on how on top of your bookkeeping you were in 2020, the process can be pretty simple or incredibly difficult. Tax Day this year is scheduled for Thursday, April 15. Although the country received a three month extension in 2020, we should not plan for one this year - plan on getting your tax return filed by April 15 at the latest.
Decide how you’ll file & who will file for you.
Have you had a major life event occur in the past year that will impact your taxes? This could be a marriage, divorce, widowhood, or parenthood. If yes, this will need to be updated on your tax return and you will need to decide how you’d like to file.&nbs
The W-4 form we have been using for years and years has been revamped. Beginning in 2020, if you are a new hire to a company, you will be given the new W-4 form to fill out. If you follow the form exactly as it’s laid out, filling it out should be a fairly simple process. There are no tricks. The IRS has very clearly laid out instructions in each box for your convenience and guidance.
If you are not a new employee in 2020 (or beyond), your W-4 form will remain the same and you will continue being taxed as you have been. Nothing will change for you. The new form is designed to work seamlessly with the previous form. However, if you decide to change how you file, you will need to fill out the updated form. Talk with whoever does your payroll to ensure you understand it and what it means for your taxes.
Choosing your filing status is one of the first sections you fill out when preparing your taxes. Your filing status refers to your marital status and your family situation. It’s important to choose the correct option for your specific situation so your return will reflect accordingly. Your filing status will determine which tax forms you need to complete, and which income bracket you’ll fall under.
Something to keep in mind is the IRS looks at your marital status on the last day of Tax Year to determine your status for the entire Tax Year. In this case, it would be December 31, 2019.
Tax season will begin soon, which means it’s time to start issuing tax forms to employees, independent contractors, and vendors. A 1099 is a tax form that describes wages paid to someone not by their employer, and must be issued by January 31. Who should you send a 1099 to this tax season? A basic rule of thumb is to issue a 1099 to anyone you paid over $600 throughout the year, but follow our flow chart for guidance.
Below is a decision-making tool to help you decide if you should send a 1099. Follow the bolded questions, choose between the options given, and follow the arrows until you find your answer.
WHAT DID YOU PAY THE VENDOR FOR?
Rent → Did you pay over $600?
Tax season is just around the corner! If you pass off your taxes to your tax preparer, whoever it may be, then you may not be aware of all the information your W-2 holds. Since this information pertains entirely to you, we encourage you to become familiar with the basics. Grab an old W-2 from past years (yes, you need to save these) to use as a reference. It may look intimidating, but everything is broken down very particularly and you’ll have a basic understanding of it by the time you’re finished.
Tax Season comes around every year, yet people still always scramble come mid-February when filing has taken way like they had no idea it was coming. This tax season, that won’t be you. Follow our simple steps for preparing to file taxes - what to do before you file for an easier experience while filing.
First and foremost, you’ll want to schedule an appointment with your tax preparer, whoever it may be. If you don’t have a tax preparer, reference our blog on how to find a reputable tax preparer you can trust. Once your appointment is scheduled, it’s time to turn to your important documents. This includes any documents that track your income, personal information, banking information, and records of any purchases.
Accountants wouldn’t benefit from QuickBooks, right? Wrong! QuickBooks is a fantastic tool for them; they have a software specifically tailored for accountants to help them do their job better, faster, and more efficiently. It’s a triple threat for accountants!
Not only will QB Online Accountant display all of your clients that are QB users, but also the clients that are not. This allows accountants to see a big picture list of their clients before diving into each more in-depth. All the client information and notes can be recorded here and easy to reach for reference. Bonus: it’s a breeze adding clients - even non-QuickBooks clients!
Tax season is approaching, which for some may mean stress and anxiety. What if we told you those feelings aren’t necessary? Take a deep breath and rest easy knowing that these tips will help you make your tax preparation smooth sailing.
As tax season rolls around, it’s important to know your options and to choose what’s best for you. This includes whether to have a Certified Public Accountant (CPA) do your taxes or TurboTax.
For a little background, TurboTax is an American tax preparation software. It’s the #1 best-selling tax preparation software, which means it must be the best choice for everyone, right? As a matter of fact, if you have opened a small business or own one, hiring a CPA during tax season is the way to go, not a software program.