Tax season is coming: face it fully prepared by following these simple tips
Did you know that the number of car accidents is much higher during tax season?
Panic kills. So get rid of it with our simple tips!
Organize your donations smartly, avoid fines and tax liens (even if you don’t have the money to pay someone to do your tax returns), and plan the filing of your tax returns – it’s all easier than you could even imagine.
Keep all your bills organized
Gather all the charity bills and checks paid during the year and organize them properly.
Donations give you a significant tax reduction. But you have to provide legal confirmation of your contribution such as, for instance, bank records. Losing your checks leads to the IRS refusing to accept your tax deduction request. If you are an entrepreneur, gathering and organizing paper records is required at least for a proper audit. If you often lose important papers, scan the documents and make them digital. Find out more on tax deductions from household donations in Form 8283 that should be attached to your tax return. Mind that the items you want to donate should be rich in quality!
File a tax return even if you can’t pay on time
Experiencing financial issues should not stop you from filing tax returns. Avoid getting two penalties – one for not paying on time and the second for not filing at all. They will not make a positive impact on your financial situation! Check the options you have in case of money scarcity.
- Get your long-term individual payment plan
Apply online or fill out the forms and send them directly to the IRS. It works if you have to pay up to $50,000. You get the opportunity to pay taxes and avoid tax liens.
Take the opportunity to pay your debt in a term lasting from 24 to 72 months! To apply, file Form 9465, Form 433-D, Form 433-F and mail them. Do it directly after filing your tax return and get your own tax payment plan. Pay small amounts monthly and cover your tax return in the appropriate term.
- Apply for a short-term extension
Solve temporal financial issues by getting an extension of time for filing without fines or tax liens. Get a 120-day extension for filing tax returns and avoid any tax issues. For individual taxpayers, there are two options. Apply online for the extension request or fill in the Form 4868 and mail it to the IRS to get more time for resolving your financial problems and paying taxes.
- Find a compromise
Fill and mail Form 656 to get a compromise concerning decreasing the amount of taxes you have to pay. In case of financial difficulties caused by paying tax returns, you can get some alternative offer. Mind that this option is available only in case of real issues connected with a payment of topical debts.
File tax returns in advance
Gather all your checks and bank statements, prepare your tax deduction forms, check the information you want to send and fill out your tax forms prior to the deadline. Avoid mistakes and panic!
If you discover that some information or a bill is missing, it’s better to have some time in reserve. If your social status and income have remained the same, you can copy the information from a previous form. Any life changing events like marriage require your consideration while filing taxes. It’s always better to have extra time to ensure you provide the right information to the IRS! Keep all your tax records for 3 years at least to have confidence in case of an audit.
Make your filing easier and use special tools for counting taxes like the Withholding Estimator from the IRS.