It's a new year which means it's the season for making resolutions and filing tax returns. For many people, tax season is extremely stressful. But, the process is much less hectic when you don’t wait until the last minute!
Not only does it help to know when taxes are due for the year, but it’s also important to get a head start. The sooner you begin, the better off you’ll be. Starting early also means that you can avoid paying costly penalties.
Here are some tips to help you get a head start on the 2022 tax season.
Tax Season Tips
1. Decide How You Want To File
There are three ways to file your taxes. To get a head start this tax season, figure out which method is the most convenient for you. Here’s what you need to know about each way to file your taxes:
- File by yourself: Everyone can choose to file their taxes on their own through the IRS. The IRS provides all the necessary forms on their website for Americans to file taxes. The forms should be printed, filled out, and then mailed to the IRS.
- File online using tax software: There are many different tax filing software options available today. The software should walk you through the tax preparation process by asking questions and collecting input.
- File using a tax professional: Working with a professional tax preparer makes filing taxes a breeze, and they’ll help mitigate any mistakes by doing them yourself. Though these services come at a cost, they make filing taxes extremely convenient.
No matter how you choose to file, make sure that your tax return is submitted to the IRS before the due date. This year taxes can be submitted to the IRS starting January 24, 2022, and must be filed by April 18, 2022.
2. Get Informed About Taxable Income and Tax Deductions
After paying taxes all year long, you don’t want to make a mistake on your taxes that will keep you from maximizing your tax return. Many people think that taxable income simply includes wages and salaries. However, taxable income is all the gross pay that you receive, including earnings outside of your everyday job.
Wages and salaries aside, your taxable income also includes interest income and miscellaneous income. You can find in-depth information about taxable income on the IRS website.
Tax deductions on the other hand reduce the amount of income that is taxable. Tax deductions can include any expenses that are required to make income. Deductions also include charitable, retirement fund contributions, and others.
3. Gather Required Documents
One of the most tedious parts of filing taxes is organizing all of the necessary documents. Before April rolls around, take some time to find all of the documents you need in order to file your taxes. There are several documents that you will need to collect before you can begin filing, including your W-2 form or 1099 form if you’re self-employed.
If you own a business or collect rental income, there are other documents that you will want to have readily available before you begin filing.
Getting a head start on filing taxes is the best way to eliminate the stress and frustration that comes with filing taxes. The sooner you get ready for the tax season, the easier it will be. If you need help getting started, contact the accounting professionals at Satty, Levine & Ciacco, CPAs. P.C.