If you haven’t filed your tax return yet, read these tips before you start. Photo: American Ratings Corporation ©2018
It’s springtime, and with the longer days and milder weather, the last thing you probably want to do is your tax return. But the deadline for filing returns is just around the corner. If you’ve been putting off the inevitable, or if doing your taxes was a more harried experience than you would have liked, review these tips for getting through tax season.
Hire the right tax professional.
If you won’t be doing your taxes yourself, don’t just ask a friend who’s good with numbers for help. By law, anyone who prepares taxes on behalf of another is required to have a license. The California Tax Education Council (CTEC) awards the most basic level of certification. Enrolled agents are professionals who specialize in tax preparation. CPAs do many forms of accounting and tax preparation, and some attorneys may also prepare taxes.
Anticipate tax changes.
If you experienced a major life change in the past year (buying a house, getting married, having a child, etc.), your tax return will be very different compared to last year. Even if the past year was uneventful, note that state and local taxes vary from year to year. Additionally, Congress passed a major overhaul of the federal tax code at the end of 2017. Among its many changes, the overhaul put an end to the personal exemption but doubled the child tax credit. With all this in mind, recognize that no tax return is going to look identical to the previous year’s.
Notice how business income is taxed.
The 2017 tax overhaul dramatically changed how business income is taxed. If you’re a small-business owner, go over your current tax obligations with your accountant. He or she may advise altering how your company is incorporated to better optimize your taxes. Depending on the structure of your business’ income, you may now find it advantageous to be an LLC rather than a sole proprietor, for example.
Read over your tax return.
Whether you do you taxes yourself or hire a professional, the buck ultimately stops with you. The IRS will hold you accountable for any errors or incorrect information. That’s why it’s important to carefully review your tax return before submitting it. While you don’t need to grasp every detail of the tax code, don’t hesitate to ask questions if there’s something you don’t understand.
Don’t forget the signature!
If you’ve hired someone to help prepare your taxes, they’re required by law to sign the return. Make sure they do so before sending in your paperwork.