You might think your taxes are set in stone on December 31, but that isn’t always the case. You can do some things in January that will help reduce your tax obligation. And, you can get ready for tax season so you won’t be doing everything at the last minute. The sooner you get your documents to tax attorneys, the sooner you can be done with this yearly hassle.
Get Ready for Tax Season
Before you do anything, you should start getting ready to file taxes, especially if you know that you’ll have all of your documentation from income sources by the end of January. The sooner you file, the better it is. To get a good jump on tax season:
- Locate all of your records, including receipts, W2s, 1099s, and other tax documentation.
- If your records are not organized, organize them in an expandable filing folder (redwell) by date. You can even go so far as to use manilla envelopes to keep receipts, pay records, and other documentation in their own sections of the redwell.
- If you attempt to do your taxes yourself, be sure you have all the forms from the Internal Revenue Service (IRS). Be sure to read through the IRS website, as tax laws change every year.
- Take your time doing your taxes. Set aside a couple of hours when you can eliminate distractions. You can also do your taxes over a couple of days.
- Double-check your math.
- Choose direct deposit – you’ll get your refund faster.
If you run into a problem or don’t understand something, don’t guess. It could lead to an audit. Instead, contact the tax attorneys at France Law Firm to help you over the hurdle.
Additional Tax Tips for January
We are not just tax attorneys but business tax attorneys, too. We can help you find every deduction and all of the ways to decrease your tax burden. The government often changes tax laws, which makes personal taxes difficult and small business taxes even more difficult. Whether you decide to do your taxes or retain tax attorneys, you can still take steps to make tax season easier.
- Retirement Accounts. You have until the tax filing deadline to contribute to retirement accounts. If you haven’t contributed in the current tax year yet, you still have time to contribute to a traditional or Roth IRA, even though it’s after December 31. Not only will this help lower your tax obligation, the contributions compound tax-deferred.
- Get Rid of Tax Penalties. If you didn’t pay enough to the IRS throughout the year, you could see interest and penalties. This is for those who are self-employed. W2 employees have contributions every pay period. The IRS will charge you an underpayment penalty if you don’t pay 100 percent of last year’s tax liability before the taxes are due. While you’ll still see penalties and interest for the first three quarters, you can eliminate the tax for the fourth quarter with a payment in January.
- Deductions. While it’s easier to take the standard deduction, itemizing deductions can often wipe out hundreds or thousands of dollars of tax liability. If your deductions add up to more than the standard deduction, then it’s better to itemize. If you have medical expenses that exceed 7.5 percent of your adjusted gross income, you can deduct those in addition to other regular deductions.
- Home Office Deduction. If you work from home or the road and have a home office, you can take a sizable deduction. You must use the space exclusively for the home office. You can write off expenses such as a percentage of the rent, insurance, housekeeping, utilities and more. The percentage is the percentage of the space in your home.
Contact France Law Firm
Filing taxes can be a major headache, especially if you have a small business or invest in stocks. While using a tax attorney doesn’t guarantee you won’t be audited, the risk is lower. If you are unsure about filing taxes, contact the tax attorneys or business tax attorneys at France Law Firm for help.