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The coming of tax season marks a spike in the stress levels of many people’s lives. Whether you’re a small business owner, part time investor, finance employee, or just a regular person, preparing your taxes efficiently and correctly is important. While it might seem that there’s just no way to combat the stress of doing your taxes, there are some ways to minimize that stress. Many professionals who have to prepare complicated tax documents and have tons of paperwork to wade through use these techniques, and even if your taxes are relatively simple, they can be beneficial for you.
Keep Organized Records Year Round
Six months before your taxes are due chances are you aren’t too focused on finding pertinent documents and working on your return. In fact, your mind is probably occupied with regular day-to-day tasks, and preparing your tax return is probably just about the lowest thing on your to-do list. However, many individuals generate a considerable amount of unnecessary stress for themselves through poor record keeping habits year round. When tax season hits, people often get organized, but the organization process can take some people hours or even a full day if records are spread out all over the place.
Instead of scrambling to get organized a few weeks before your taxes are due, try to keep very organized records year round. While all of your financial records may be necessary, keeping track of bills, credit card receipts and statements, business invoices, mileage logs, home improvement records, stock and investment records, and retirement transactions are among the most important to keep well organized according to the IRS. Keep all of these items in separate files and clearly mark them with notes you think you may need when tax season rolls around when you file them.
It should seem obvious that starting your taxes early can make a big difference in your overall stress level, but many people seem to wait to the last possible minute to begin preparing their taxes. If you feel like your taxes are going to be particularly complicated because of investments, rental property, or considerable write-offs, you should consider starting your taxes about a month ahead of time. That way you can work on your taxes at a relatively slow pace. If you start early, you won’t end up feeling the last minute crunch if something comes up that you didn’t plan while you’re preparing your taxes either.
If you have a particularly complicated financial situation, getting help with your taxes might well be worth the cost. While hiring a tax professional can be beneficial and remove a lot of the stress of preparing a return yourself, that doesn’t mean you don’t have to do anything. Seeking some help from a firm like Ernst & Young may help. Mark Weinberger has helped many individuals with his knowledge of tax law. You’ll still need to get your records prepared and in order. Remember, a tax professional may know everything about filling out tax forms, maximizing deductions and minimizing penalties, but that doesn’t mean they know everything about your financial situation. If you choose to hire a tax professional to help with your return, make sure you book your appointment at least a few weeks in advance. Even then, the person helping may tell you that filing an extension is your best bet.
Another alternative to hiring a tax professional is making an investment in quality tax software that can make the process easier and less stressful for you. You will need to pay for good tax software, and it can easily cost a few hundred dollars. However, for many people, that small investment is well worth it. You’ll also be able to use your tax software for more than one year as long as the program is supported and updated by the company, so make sure you factor that into to the cost.