10 Steps to Tax Preparation

Tax season is among us! Don’t get caught without utilizing some steps to tax preparation. If you’re one of the sixty percent purchasing the services of a tax preparer, it’s best to begin the process of getting your information together, so that person can have a smooth process. You need time to collect your documents, and if possible, place them into categories.

Steps to Tax Preparation

Steps to Tax Preparation

  • If you choose to go with a tax preparer, you better find a good one.
  • Find and organize all of the information needed for your return.
  • Pile up all your receipts and records, then head out on your mission.
  • Learn about new tax laws and possible changes.
  • List your personal information because the tax preparer will need it.
  • Do you need to file an extension?

The Tax Preparer

The tax preparer is in place to help you, so when assessing the steps to tax preparation, we’ll have to begin with that brave man or woman, who will tackle all of your year’s expenses, but first, you have to find him or her. Maybe your mom knows of one or your best friend or your daughter’s kindergarten teacher. It doesn’t matter where the recommendation comes from, but if it comes from a reputable source, use it. It can’t be any random Jane Doe, however.

If this person wants her hands on your expense report. She has to have a PTIN, or a Preparer Tax identification Number, so you and the federal government can rest assured that she’s qualified and authorized to handle your tax return. If you find yourself at a brick wall during the hunt, the IRS has compiled a nice list that’s worth browsing about things to look for when picking a tax preparer. They also have a very useful directory that allows you to search by the preparer’s qualifications if you’re browsing for one that meets certain standards.

You want to meet up with your tax preparer as soon as possible, so you can receive your refund as soon as possible. Don’t idle and wait because you could end up regretting it. The closer it gets to April 15, the harder it’ll get for your preparer to squeeze you in to her busy schedule. Then all of the steps to tax preparation you took would be in vain.

Make Tax Prep Easy for Everyone Involved

It’d be great if you could make tax preparation good for everyone by gathering your information ahead of time, so you’re not wasting anyone’s time. You can’t have steps to tax preparation and forget to compile your data. There are several forms that should be in your possession, so get to shoveling through your garbage and check underneath the couch cushions to fish those out. You should’ve received a W-2 form from your job, an SSA-1099 form if you obtained any social security benefits, and a host of other forms that apply to the needs of your life. If you declared bankruptcy, if you have a mortgage, if you’ve won a large sum in gambling, if you own a property, even your health insurance, purchased from the Health Care Insurance Marketplace/Exchange has a form, and all of these things need to be gathered and brought to your tax preparer pronto.

Apart from your forms, you also need to gather your records and receipts. It’s a key step to tax preparation. You could even divide them up to see which ones are personal expenses and which ones could be used for a bigger tax write-off. This is a good way to figure out your deductions for the year. Organization is key in this department, so do the best you can in minimizing the clutter and disorganization.

You have to do the same thing with your records. If you found yourself giving to charity, you actually have to contact that organization and get it in writing that they received a gift from you. This will be helpful when you want to receive a write-off for this. Speed is very important. You don’t want to wait until last minute and not be able to claim the donations of last year on your taxes.

Gathering your information is a vital step to tax preparation and that includes your personal information. There are random bits of information that will take longer for you recollect, but will be needed when preparing your taxes. For instance, you’ll need to know the exact location of last year’s vacation, the address of each of your rental properties, the date you sold your boat or your homes. These are the types of things that you’ll need.

Hands down the most exciting in these steps to tax preparation, is the refund. It’s what you’ve been doing all of this work for! There are several options you have when you get your refund back. You can have the money given to you in the form of a check or deposited into the bank, or it could go towards your next return, health insurance, or different types of savings. Good luck on your journey and have fun getting through tax season!